Idemitsu Kosan Co., Ltd. (Headquarters: Chiyoda-ku, Tokyo; President: Akihiko Tembo; hereafter "Idemitsu") and Mitsui Chemicals, Inc. (Headquarters: Minato-ku, Tokyo; President: Kenji Fujiyoshi; hereafter "Mitsui") hereby announce that each company has reached a decision to participate alongside Kuwait Petroleum International (hereafter "KPI") and Petro Vietnam (hereafter, "PVN") in the joint venture "Nghi Son Refinery & Petrochemical Limited Liability Company (tentative name)" in order to conduct detailed engineering design and construction of the "Vietnam Nghi Son Refinery & Petrochemical Complex."
1. Overview of the Joint Venture
| (1) | Company Name | (Tentatively) Nghi Son Refinery & Petrochemical Limited Liability Company |
|---|---|---|
| (2) | Location | Nghi Son Economic Zone, Thanh Hóa Province, Socialist Republic of Viet Nam |
| (3) | Established | To be established after acquiring an investment license in June 2008 |
| (4) | Paid-in Capital | 200 million USD (approximately ¥20 billion) |
| (5) | Investment Ratio | Idemitsu 35.1%, KPI 35.1%, PVN 25.1%, Mitsui 4.7% |
| (6) | Refining Capacity | 200,000 bbl./day |
| (7) | Construction Costs | Approximately 5.8 billion USD (approximately ¥580 billion) * Fundraising for a target 70% of the above to be raised through project financing |
2. Future Timetable
Basic equipment design, economic efficiency and finance scheme will be materialized within around 2 years after establishing the joint venture, in order to determine whether or not to proceed with the construction.The commercial operation will be targeted to start at the end of 2013, after we proceed to the construction.We will make an additional announcement in the event we decide to proceed with the construction.
3. Rationale for Idemitsu's Investment
(1) To contribute to the further development of the partnership with Vietnam by participating in the energy supply business, an extremely important business for the country which is experiencing continued rapid growth.
(2) To establish an earnings foundation in Vietnam through this transaction which allows Idemitsu to capture the rapidly increasing domestic demand for petroleum products in Vietnam, leveraging the construction and operation technologies accumulated in its petroleum and petrochemical businesses, based on a stable supply of Kuwaiti crude oil.
(3) To capitalize on further expected business expansion opportunities in Asia, including the petrochemical business and retail businesses dealing with petroleum products.
(4) To contribute to stable crude oil procurement by further strengthening the relationship between Idemitsu and the oil producing countries (Kuwait and Vietnam) through this joint enterprise between the two nations.
4. Rationale for Mitsui's Investment
To ensure stable procurement of aroma raw materials in order to achieve stability and profit expansion in the PTA and phenol businesses.
5. Signing Ceremony
A signing ceremony is planned to take place in Hanoi, Vietnam in early April of 2008.
Reference
Map of the Planned Construction Site for Nghi Son Refinery
Used by permission of the University of Texas Libraries
Overview of Vietnam
| (1) | Official Name | Socialist Republic of Viet Nam |
|---|---|---|
| (2) | Capital | Hanoi |
| (3) | President | Nguyễn Minh Triết |
| (4) | Prime Minister | Nguyễn Tấn Dũng |
| (5) | Population | Approximately 84 million (approximately 60% of Japan) |
| (6) | Area | Approximately 330,000 sq. km (approximately 88% of Japan) |
| (7) | (norminal) GDP | Approximately 60.8 billion USD |
| (8) | Official Language | Vietnamese |
For inquiries regarding this press release, please contact
PR Dept.
Idemitsu Kosan Co., Ltd.
Tel: +81-3-3213-3115
CSR / IR Division
Mitsui Chemicals, Inc.
Tel: +81-3-6253-2100
