Russia and Vietnam Sign Framework Agreement for 1 Million Ton Strategic Crude Oil Reserve Project

en.Wedoany.com Reported - On September 9, Russian state-owned oil and gas company Zarubezhneft and Vietnam National Industry and Energy Group (Petrovietnam) signed a framework agreement for investment research on a strategic crude oil reserve system. The agreement was exchanged during the visit of To Lam, General Secretary of the Communist Party of Vietnam Central Committee and President of Vietnam, to Russia, with cooperation aimed at the construction of strategic crude oil reserve facilities in Vietnam. According to a research plan previously published by Petrovietnam, the national crude oil reserve project is planned to be located in the Dung Quat Economic Zone in Quang Ngai Province, with a planned strategic crude oil reserve capacity of 1 million tons, while reserving part of the capacity for commercial operations.

The project is currently in the investment research and feasibility study preparation stage. According to the schedule announced by Petrovietnam in August, the project is planned to complete the feasibility study by the end of the second quarter of 2027, then proceed with investment procedures and contractor selection, and is planned to enter the EPC implementation stage from early 2028. The final capacity of the commercial operation portion will be further determined during the feasibility study stage.

The Dung Quat strategic crude oil reserve project will be advanced based on the existing Dung Quat Refinery and local oil and gas infrastructure. The Dung Quat Refinery currently has a crude oil processing capacity of 6.5 million tons per year, and the existing upgrade and expansion project plans to increase the processing capacity to 7.5 million tons per year, with a total investment of approximately USD 1.5 billion. The EPC contract was signed in July 2026. The strategic reserve facilities and the refinery expansion are different projects, but both are located within the Dung Quat industrial energy system.

This framework agreement continues the cooperation between Russia and Vietnam since March 2026 on long-term oil supply and storage and transportation facility construction. On March 24, during a meeting with the management of Zarubezhneft in Russia, Vietnamese Prime Minister Pham Minh Chinh requested the company to study, together with Petrovietnam and other Vietnamese enterprises, the long-term and stable supply of oil, natural gas and related products to Vietnam, and to study the construction of oil product storage infrastructure in Vietnam. The relevant projects need to undergo subsequent approval procedures in accordance with Vietnamese law, energy development strategy and planning.

In June, the Russian side further proposed participating in the construction of Vietnam's strategic petroleum reserve system. The framework agreement signed in September transformed the previous project research at the government and enterprise levels into a formal cooperation document between the two enterprises, with the core entities still being Petrovietnam and Zarubezhneft.

The Vietnamese government is currently also advancing the layout of crude oil and refined oil storage facilities in Nghi Son, Dung Quat and Long Son. The Vietnamese government has requested Petrovietnam to advance the Nghi Son crude oil reserve project, and has requested the Ministry of Industry and Trade to continue studying additional oil and crude oil storage facilities in Dung Quat, Long Son and other areas. The existing policy arrangement proposes that reserve infrastructure can be invested in and built by enterprises, and the state will subsequently study ways to form reserve capacity through procurement or leasing of facilities.

The Dung Quat project has now formed a project timeline chain of "1 million tons of strategic reserve capacity — completion of feasibility study by the end of the second quarter of 2027 — completion of investment procedures and contractor selection — launch of EPC in early 2028." The Russia-Vietnam framework agreement signed on September 9 corresponds to an early-stage cooperation milestone within this chain, and subsequent substantive progress will depend on the results of the feasibility study, investment approval and contractor selection.