2011-07-26
Environmental & Social Review SummaryThis Environmental and Social Review Summary is prepared and distributed in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board of Director’s decision. Board dates are estimates only.
Any documentation which is attached to this Environmental and Social Review Summary has been prepared by the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content.
Project number: 29640
Country: Vietnam
Sector: Oil Refineries
Department: Reg Manufact, Agri & Services, ASIA
Company name: Nghi Son Refinery and Petrochemical LLC
Environmental category: A
Status: ApprovedDate ESRS disclosed March 18, 2011
Date revised ESRS disclosed March 29, 2011
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Overview: Category & Applicable Standards
Key Issues & Mitigation Community Engagements
Availability of Full Documentation
Overview of IFC's scope of reviewIFC’s appraisal reviewed the effectiveness of the Company’s Environmental, Health and Safety (EHS), social and labor management activities and the ability of the organization to ensure compliance with Vietnamese regulatory requirements and IFC’s Performance Standards during construction and operation of the Project. Specific items reviewed included: (a) existing Environmental and Social Impact Assessment (ESIA), related Studies and Reports, and corresponding Environmental and Social Management Plans (ESMPs) as currently approved by the local authorities (b) human resources policies and management of the Company, its contractors and subcontractors, (c) supplemental studies and management plans developed by NSRP (Stakeholder Engagement Plan, Resettlement Policy Framework and Resettlement Due-Diligence Summary Report.)
Project description
Vietnam Oil and Gas Group, Kuwait Petroleum International, Idemitsu Kosan Co., Ltd., and Mitsui Chemicals, Inc have established a joint venture company, Nghi Son Refinery & Petrochemical LLC (“NSRP” or the “Company”), to implement the construction and operation of a refinery and petrochemical complex in the Nghi Son Economic Zone (NSEZ) and associated offshore facilities, in the Thanh Hóa Province in Vietnam. The project is located 200 km south of Hanoi and about 80 km north of Vinh City (Nghe An Province). The total onshore area is about 400 ha. The project includes the construction of the following installations:
Onshore Installations: Main Refinery and Petrochemical Complex, (328ha), Onshore Pipeline route from the plant to the Jetties (30ha), and a Marine harbour (36ha).
Offshore Installations: main breakwater: access channel; turning basin; intake channel (193ha), crude oil pipeline (35ha), and a single point mooring (SPM) (31ha.) The project will also include a 30,000 DWT vessels harbor with four berths (two berths per jetty) for export of white products (i.e., jet fuel, paraxylene, benzene, gasoline) ; one berth for the export of LPG; one berth for transfer of sulphur (dry bulk); one berth for the transfer of polypropylene (containerized); and a berthing facility for service vessels/tugs.The harbour is sited in front of the Petrochemical Complex. The total harbour onshore area is about 36 ha. The product jetties / service berths for exporting products will be located to the east of the plant adjacent to the beach. The harbour access marine route will generally run in an east-northeast direction passing about 5.5 km away from the offshore islands of the Hon Me Archipelagoes. The Hon Me archipelago, with many small islands, is located 14.5km from the shore.
The offshore SPM is located at about 33.5 km from the harbour site and in a deeper natural water depth of 27m at the east side of Hon Me Island. The Single Point Mooring (SPM) has been located 35 km from the shoreline to avoid dredging a very large approach channel and affect environmental sensitive areas (coral reef).
An approximately 35 km double crude oil pipeline system will be built to bring the crude oil import from the SPM to the refinery. Approx 33.5km will be sub-sea and the remaining 2 km will rest onshore but will also be buried. An onshore portion of the crude pipeline route will go in the same pipeline corridor of the product pipeline system. The product pipeline system, which will send the refined products from the refinery to the products jetties, will run along the along the northern 350m corridor connecting the product tank farm and product jetties. An additional pipeline will carry the return of LPG vapor to the LPG storage tank.
A Sulphur Forming and Storage Unit, which will form solid Sulphur, stockpile, reclaim, transfer, weight and shipload solidified sulphur will be also located in the Jetty area. The product from this unit will be exported through a dedicated sulphur loading berth at the solid products export jetty.
The plant site is surrounded by residential areas of the Hai Yen, Mai Lam and Tinh Hai Communes. Local authorities have almost completed the physical relocation 830 households for the project. Currently, there are still some residents living close to plant boundary toward the eastern and northern part. The company has begun discussions with the Government of Vietnam to move all houses located at the Eastern side of the plant before the project begins operation.
NSRP will enter into an engineering, procurement and construction (EPC) contract with a consortium of major international engineering firms, which will be selected through competitive bidding to implement the Project.
The Project’s nameplate crude oil processing capacity would be 200,000 barrels per day. Refined products (liquefied petroleum gas (LPG), gasoline, kerosene/jet A1 and diesel), accounting for about 80% of NSRP’s total projected sales, will be sold into the domestic market. Petrochemical products (polypropylene, benzene and paraxylene) will be produced for domestic and export markets. The project will also recover sulphur which will be also sold to the export market. The feedstock for the Project would be Kuwait export crude.
As part of the concession agreement the Vietnamese government is responsible for clearing and leveling the site to enable NSRP to initiate construction. Nghi Son Project Management Board (NSPMB) will hand over the project site to NSRP once the resettlement is completed and the technical specifications for the site leveling have been met.
Source: www.ifc.org
