Phu My, Vietnam


Vietnam Oil and Gas Corporation (Petro Vietnam) awarded a contract to a consortium of Technip and Samsung Engineering for the implementation of a fertiliser complex at Phu My in Tan Thanh, Ba Ria Vun-Tau Province, in Vietnam. The contract was signed in June 2001.

The Phu My fertiliser plant will use natural gas from the Cuu Long and Nam Con Son basins. It is part of an industrial centre which the Vietnamese government is seeking to encourage in the hope that the facilities, such as power generation, will be of common usefulness to all the local industrial plants.

TIMETABLE

"The facility will supply one third of the country's annual fertiliser demand and stabilise the fertiliser market for Vietnamese farmers."

The contract was awarded in 2001 and by June 2004 the construction of the $445m plant was completed. Following two months of testing, the facility was officially opened in September 2004. It will now supply one third of the country's annual fertiliser demand and stabilise the fertiliser market for the majority of Vietnamese farmers.

The Phu My Fertilizer Plant has a capacity of 741,400t of urea/year and 422,598t of ammonia/year. PetroVietnam Fertilizer and Chemical Co (PVFCCo) was formed to control and administer the activities of the plant.

DESIGN AND PRODUCTION

The plant, on which work began early in 2001, is designed to be the largest of its kind in the country, and run with gas drilled from the Cuu Long and Nam Con Son basins. The plant uses 450–600m³ of gas/year. Technip was the leader of the Consortium and the project was implemented in Technip offices in Rome, Samsung Engineering offices in Seoul and on the Phu My site area.

The contract, on a lump sum turnkey basis and for an amount of $45m, covered design, engineering, supply of equipment and materials, construction, commissioning, start up and training of personnel (700 employed at the plant). The Phu My Fertilizer Complex produces 1,350t/d ammonia based on Haldor Topsoe technology and 2,200t/d urea based on Snamprogetti technology, with complete utilities and offsites, including production and export of electric power.

The plant has two main areas producing urea and ammonia. There are also 22 systems, including the electricity production system with a capacity of 23MW (gas turbine), the nitrogen production system with a capacity of 240m³ of nitrogen/hour, the control system, the laboratory, the 35m³ ammonia tank and other equipment.

Between September 2004 and May 2007, the plant provided the market with 1,859,652t of urea (600,000t produced in 2006 alone) and 1,153,679t of ammonia. The output of Phu My Fertilizer meets one third of the domestic demand for urea fertiliser. Phu My Fertilizer accounts for 50% of market share in the South and Southern Central areas.

PROJECT RATIONALE

The project has now helped minimise the import of fertiliser and promote agricultural production in Cuu Long (Mekong) Delta River. It has also contributed to establishing and developing the Phu My Industrial Zone.

"The project has now helped minimise the import of fertiliser and promote agricultural production in Cuu Long Delta River."

According to the Ministry of Agriculture and Rural Development (MARD), the country needs about 3.4 million tonnes of various fertilisers in order to meet the strategic food output target of 43 million tonnes in rice equivalent within the next 20 years.

Prior to the plant opening Vietnam's chemical fertiliser industry could meet only 8% of the domestic demand for urea fertiliser and 70% of the demand for phosphate fertiliser.

This forced farmers to import large amounts of fertiliser, leaving them exposed to the vagaries of the international marketplace. The new Phu My plant meets about one third of the internal demand.

FURTHER DEVELOPMENT

The Vietnamese fertiliser industry has laid out expansion plans that will further add to domestic production. The Viet Nam Chemicals Corporation, in conjunction with Petro Vietnam, will invest a total of $1bn to build two nitrogenous fertiliser factories with an annual capacity of 800,000t each in Vung Tau and Ca Mau.

Another $745m will be spent on building a nitrogenous fertiliser factory in Quang Ninh Province with a capacity of 600,000t a year, drawing on coal resources available in the area. Upgrades will also be carried out on super phosphate factories in the provinces of Phu Tho, Dong Nai, Ha Tay and Ninh Binh.

STRATEGIC UREA RESERVE

In June 2007 the Ministry of Trade (MoT) proposed that the Government should ask the Phu My Fertilizer Plant to keep 100,000t of urea in stocks until the Ca Mau Power-Fertilizer Plant becomes operational. The proposal has faced strong opposition from the Vietnam Fertilizer Association, which said that it would be a waste to reserve urea while the product can be supplied from domestic production and imports.

The Phu My plant would have to have a regular reserve of 100,000t in stock for three years as the Ca Mau plant is still on the drawing board and would take at least three years to construct. The MoT fears that the market would face a urea shortage, which would have a bad impact on agricultural production.

OTHER PROJECTS IN PHU MY

An industrial park hosting gas powered thermo-electrical plants has also been constructed at Phu My. These plants have a total generating capacity of 3,000MW, fuelled by associated gas from offshore oil and gas fields.

"Another $745m will be spent on building a nitrogenous fertiliser factory in Quang Ninh Province with a capacity of 600,000t a year"

Electric plants include the 1,000MW Phu My 1, built with Japanese loans. The plant has capital investment worth $800m and will consume 900 million cubic metres of gas each year.

Other projects needing gas include the 431 MW Phu My 2 -1 electric plant (extended), capitalised at $350m. The plant will consume 450 million cubic metres of gas each year. The 600MW Phu My 2-2 build-operate-transfer (BOT) project, proposed by the World Bank, is worth $350m.

LEAD CONTRACTORS

The engineering, purchase and construction contracts for the Phu My Fertiliser Plant were signed by Vietnam Oil and Gas Corporation (Petro Vietnam), Italian Technip and Samsung Engineering.