PetroVietnam, foreign firms win license to build $1.27 bln gas pipeline

By VnExpress   April 26, 2017 | 06:16 am PT
The project is the biggest new investment pledge in Vietnam to receive government approval so far in 2017.

A subsidiary of state oil and gas group PetroVietnam has secured a license to invest $1.27 billion in a natural gas pipeline in southern Vietnam with foreign partners, making it the country's biggest foreign investment project to be granted official approval so far this year.

The license for the Block B - O Mon pipeline in Kien Giang Province was granted on April 20 to a joint venture between PV Gas and "a Japanese investor", the central Foreign Investment Agency said in a monthly report on Wednesday, without naming the foreign investor.

PetroVietnam has identified the foreign partner as Japan's Mitsui Oil Exploration Co, but also said Thailand's PTT Exploration and Production (PTTEP) would be a partner on the project.

The project is the biggest new investment pledge in Vietnam to receive government approval so far in 2017, while Samsung's injection of $2.5 billion into its Samsung Display Vietnam factory in March is the largest additional funding for an existing FDI project, based on data from the investment agency.

Last year, the Southeast Asian country, which has one of the world's fastest growing economies, received a record high $15.8 billion in foreign direct investment inflow.

In March 2010, PV Gas, the country's biggest listed energy firm, signed a cooperation contract with U.S. Chevron Corp, Japan's Mitsui Oil Exploration Co and Thailand's PTTEP to build the 431-kilometer (270 mile) pipeline. It is designed to take natural gas from Block B off the southern coast to two power complexes in Kien Giang and Can Tho City, both in the Mekong Delta.

The gas pipeline is expected to deliver 20.3 million cubic meters of natural gas per day to power plants in the two locations, with total capacity of 3,660 Megawatts.

In June 2015, PetroVietnam took over Chevron's stake in the gas pipeline as well as in Block B after the two failed to reach an agreement over gas prices.

In April 2016, PetroVietnam revived the giant gas project, planning to invest $6.8 billion by 2040 to construct a central processing platform, 46 wellhead and hub platforms, about 750 wells and a floating storage and offloading vessel, the group said.

PetroVietnam said the natural gas supplied to power plants in the Mekong Delta will help reduce the country's demand for foreign exchange to import oil products and liquefied petroleum gas.

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