(Recasts with Binh Son refinery working above capacity, adds
* Second-largest refinery at 103% of capacity
* PetroVietnam blames Nghi Son for production shortfall
* Petroleum companies turn to imports, assure supply
HANOI, Jan 26 (Reuters) - Vietnam's Binh Son refinery on
Wednesday said it was operating above capacity to address supply
concerns, as top petroleum firms announced plans to boost
imports amid fears of a shutdown of the country's biggest
Binh Son, one of two refineries in the Southeast Asian
nation, said it was operating at 103% of capacity and would also
import two shipments of crude oil of between 85,000 and 90,000
tonnes each, during the first days of February.
"The demand for petroleum products is increasing, especially
during the Lunar New Year holiday, while other sources are
facing difficulty," the refinery told Reuters.
The announcement comes after Vietnam's other refinery, Nghi
Son, which provides 35% of its petroleum needs, cut its
production to 80% of capacity, over what media reports and a
source familiar with the issue said was a disagreement between
shareholders about financing for crude oil.
On Wednesday, state oil firm PetroVietnam blamed Nghi Son
Refinery and Petrochemical (NSRP) for the recent production cut.
State media had reported PetroVietnam had failed to make an
early payment under a "Fuel Products Offtake Agreement" (FPOA)
with the refinery, causing financial difficulties for Nghi Son.
But PetroVietnam, which owns 25.1% of the 200,000
barrel-per-day refinery in Thanh Hoa province, insisted it was
not to blame.
"The management board of NSRP is responsible for its
decision to cancel two shipments of crude oil that put the
refinery at risk of shutdown," PetroVietnam said in a statement,
adding it was in talks with other shareholders about
NSRP did not immediately respond to a request from Reuters
Japan's Idemitsu Kosan Co has a 35.1% stake in the
Nghi Son refinery, the same as Kuwait Petroleum, while Mitsui
Chemicals Inc owns 4.7% of the firm.
A spokesperson at Idemitsu said the company was making
internal checks on the news reports. Its shares were down 8.7%
as of 0410 GMT, underperforming the broader benchmark Nikkei 225
The Vietnam News Agency on Wednesday said Vietnam National
Petroleum Group, which holds a 50% share in the local
petroleum market, and PetroVietnam Oil (PVOil) will
increase their imports to compensate for Nghi Son's decreased
Petrolimex had earlier signed an agreement to buy 235,000 to
265,000 cubic metres of petroleum products from the refinery
this year, according to the report.
(Additional reporting by Yuka Obayashi in Tokyo; Editing by