Vietnam Oil and Gas Corporation (PetroVietnam), the oil monopoly in the communist nation, set up a joint-venture with its counterparts from Japan and Kuwait to build Nghi Son refinery in the north of the country.

The Nghi Son refinery, to be operational by 2013, will turn Kuwaiti oil into petrol, liquefied petroleum gas, diesel, kerosene and jet fuel for Vietnam, which has offshore oil reserves but currently imports petroleum products.

Dung said last month the facility would create about 10,000 jobs and the state media said around 1,000 local families will be relocated from more than 500 hectares of Gia Tinh district.

Dung Quat, the country's first refinery costing around 2.5 billion dollars, is now being built after lengthy delays in central Vietnam and is expected to produce 6.5 million tonnes a year from 2009 -- equivalent to a third of the country's needs.

"By 2013, this project combined with Dung Quat refinery would ensure 65 percent of Vietnam oil and gas demand. It will contribute to ensure the nation's energy security," the Prime Minister said.