Vietnam’s Prime Minister Nguyen Tan Dung on Friday gave the green light for the oil refinery project Victory to be added to the country’s oil and gas sector development plan in the 2015-2025 period.

The US$21.5 billion project, better known as Nhon Hoi oil refinery and petrochemical project, has a processing capacity of 660,000 barrels per day, equivalent to 30 million tons of crude oil per year.

The Thai-invested plant, located in the central province of Binh Dinh, is expected to be completed in the 2021-2025 period.

The Vietnamese premier has also agreed to a number of incentives for the megaproject, in which the Thai investor – PTT Pcl – has winded down the investment by $6.5 billion compared to its initial plan.

Specifically, the head of the government agreed to include the project in the list of those having the right to enjoy special investment incentives.

The project’s owner will pay a corporate income tax of 10 percent in 15 years from its opening with tax exemption in the first four years, and 50 percent of the payable corporate income tax in the next nine years.

PTT Pcl will enjoy zero import tax rates for the import of crude oil, machinery, equipment, and materials which cannot be produced locally to build the plant.

At the same time, the investor will be allowed to sell products in Vietnam in accordance with local regulations.

The Thai investor will be exempt from land rent during the period of the refinery’s operations but the lease of land shall comply with the law.

Other preferential tax rates for petrochemical product export and an extended preferential corporate income tax of 10 percent in 30 years will be considered during next stage of the project.

Previously, in its feasible study submitted to the Ministry of Industry and Trade in late September, PTT asked to enjoy zero taxes on crude oil imports and transfer profits abroad.

It also suggested being allowed to distribute the complex’s products domestically.

Though agreeing with those propositions, the ministry turned down the Thai energy firm’s request to have its corporate income tax exempted for the first 13 years of the project, as it is against the current law.

The project, located in Nhon Hoi Economic Zone, will import crude oil from the Middle East, Africa, and South-Central America to refine into 10 kinds of fuels and 10 types of petrochemical products.

PTT’s goals are to export around 50 percent of the plant’s products, while setting aside the rest for domestic consumption.

The government of Binh Dinh Province has earmarked 2,000 hectares of cleared land in the economic zone for the oil refinery and petrochemical complex.

When coming on stream, the Nhon Hoi oil refinery is projected to contribute as much as $4-5 billion per year to the national economy.

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