Petrolimex Saigon invests 300 billion VND to build petroleum depot in Kien Luong: For market stabilisation and speculation prevention

Thuy Tien - Lan HuongSGGP Online
09:20' SA - Thứ ba, 14/09/2010

The Petrolimex Region II (Petrolimex Saigon) and the Kien Giang Trading and Tourism Company (KTC), a traditional trading partner and sole general agent of Petrolimex Saigon over the past 20 years, have just signed an agreement to build a petroleum depot in Kien Luong, Kien Giang province. This is a strategic move under the policy of stabilizing the petrol markets in Kien Giang province and neighbouring provinces, meeting social needs, increasing revenues for the province’s budget while contributing to preventing petroleum speculation and smuggling in the area over the past time.

In recent years, along with rapid socio-economic growth, demand for petroleum for transportation activities, fishing, production as well as retail industry in Kien Giang province and neighboring areas has skyrocketed.

However, the absence of a depot in the region means petroleum must be transported from other warehouses in Can Tho, Dong Thap or Ho Chi Minh City, hindering the petrol trading business.

To counter the problem, Petrolimex Saigon has teamed up with KTC to set up a plan to build a petroleum depot in Kien Luong, Kien Giang province. Once put into operation, this depot will receive petroleum directly from domestic and foreign sources, thus helping expand market shares, and serving the re-export of petrol for ships and to Cambodia.

After completion of phase 1, Kien Luong petroleum depot will be capable of storing at least 40,000 cu.m of petrol and receiving ships of 10,000-20,000 DWTDWT wharf to receive ships imported abroad, 1,000 DWT wharf to export water for vessels. The project is worth about 300 billion VND, of which 51 percent of stake was contributed by Petrolimex Saigon and the remaining by KTC.

Currently, the project's first phase is underway, scheduled to go into operation in 2011. The depot is in a convenient location about 60km from Rach Gia city and 1km from Kien Luong district.

Apart from a wharf able of receiving big vessels, a waterway system with dense river tributaries and canals along the national highways and provincial roads make it very convenient for transportation, as well as help minimise the cost. As a result, petrol supply will come quickly at reasonable prices. According to Petrolimex Saigon Deputy Directorthe Deputy director of the Petrolimex Saigon, Nguyen Van Canh, oil and petrol demand in Kien Giang province reaches 900.000 cubic metres, making up one third of petroleum demand in the Mekong Delta region.

In order to create a solid foundation for the effective management and utilisation of the depot, two businesses also plan to set up a two-member limited liablity company specialising in petroleum business in Kien Luong. This is an important step under a project to develop oil and petrol business in the province which has been fostered by the two businesses since 2006.

The petroleum business Ltd company in Kien Luong will have a charter capital of about 200 billion VND. It will be the legal entity holding the land use rights to the depot, managing the implementation and accounting for fees incurred during the project phases, It will manage the petrol trading in Kien Luong’s depot when it is completed. The board of managers will be appointed by Petrolimex Saigon and KTC./.

Thuy Tien - Lan Huong

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