Initially, Lao Petro Company was set to solely invest in the 500 million US dollar project, but many fuel companies later expressed an interest in joining the proposed project. Finally it was decided that the project would be fully financed by investors.
The investors are seeking finance to realize the 306 km pipeline project, which will carry diesel and petrol from a wharf at the Hon La coastal port in Vietnam's Quang Binh province to Laos' Khammuan province. Assistant President of Lao Petro Company, Veth Malavong confirmed that many fuel companies have expressed their interest in joining the development of the project, including Lao State Fuel Company. "We will welcome business partners to join the project development," Veth told.
The feasibility study for the project is being finalised and is expected to be submitted to Lao government for consideration in Feburary, Veth said.
The project, which has been supported by the governments of Laos and Vietnam, would involve the building of two pipelines to carry diesel and petrol, as well as constructing warehouses and pumping stations.
The bonded warehouse at Hon La seaport is expected to be capable of storing 300,000 to 500,000 cubic meters of fuel products; Another 100,000-200,000 cubic metre warehouse will also be built in Lao Khammuan's Thakhek district. A bonded warehouse is a building in which dutiable goods may be stored, manipulated, or undergo manufacturing operations without payment of duty.
Transporting oil products via the pipeline between Hon La seaport and Khammuan is seen as a convenient route thanks to the short distance between Quang Binh and Laos. The project is expected to help reduce transportation costs for oil products and ensure energy security for Laos.
Minister Khammany said there is another idea to build a refinery plant in Laos and import unrefined oil through the pipeline to be fully processed in Laos in order to reduce energy costs, saying that crude oil on the global market is cheap.
However, he added that proper studies are needed to research potential social and environmental impacts of importing crude oil for a refinery.