Japan-based Idemitsu Kosan, along with its partners and co-investors Mitsui Chemicals, Kuwait Petroleum International and PetroVietnam, has reached a final investment decision on the $9bn oil refinery in Vietnam.

Idemitsu will be building the 200,000 barrels per day Nghi Son Refinery and Petrochemical Complex about 200km south of Hanoi in Tinh Gia District of Thanh Hoa Province, to meet the growing demand for petroleum products in the domestic market.

In order to set up the new refinery, Idemitsu and partners formed a company called Nghi Son Refinery and Petrochemical (NSRP).

NSRP has entered into project financing agreements to raise $5bn from public financial institutions and commercial banks for the project.

The remaining $4bn will be directly borne by sponsors, of which Idemitsu will provide investments or loans of around $1.4bn corresponding to its interest percentage in shares.

The construction of the Nghi Son Refinery and Petrochemical Complex is expected to begin in July 2013 and to be completed in 2016, while commercial operations expected to start in 2017.