Vietnam revives billion-dollar gas project after Chevron steps aside

By Toan Dao   April 4, 2016 | 12:07 pm GMT+7

Vietnam’s national oil and gas group PetroVietnam on Sunday resumed activities at its Block B gas project in the country’s southwest, following years of delays due to gas price issues.

Prime Minister Nguyen Tan Dung took part in a ceremony held by PetroVietnam in the southern province of Kien Giang on April 3. He urged the company to speed up the project to help ensure national energy security, according to a statement posted on the government's website on Sunday.

U.S. operator Chevron and PetroVietnam failed to agree on gas prices following some sizable gas finds at the project in 2002 and 2008. In a resolute decision to end the deadlock at Block B, PetroVietnam inked deals in June last year to take over the three oil and gas blocks by acquiring Chevron's stakes in the blocks and gas pipeline. These included a 42.4 percent stake in blocks B and 48/95, 43.4 percent in Block 52/97 and 28.7 percent of non-operated working interest in the Block B-O Mon pipeline project. 

PetroVietnam plans to invest $6.8 billion by 2040 to construct a central processing platform; 46 wellhead and hub platforms; about 750 wells; a floating storage and offloading vessel; and living quarters. A 431km gas pipeline worth $1.2 billion will also be constructed to transport 20.3 million cubic meters per day of natural gas to fuel several power plants in the south with total capacity of 3,660 MW.

These projects will help PetroVietnam and other investors pump about 5.06 billion cubic meters of natural gas per year from 2020-2040. The three blocks in the project are estimated to contain 107 billion cubic meters of natural gas and 12.65 million barrels of condensate.

Joining PetroVietnam in blocks B and 48/95 are Japan's Mitsui Oil Exploration Co. Ltd. (25.62 percent), PetroVietnam Exploration and Production (23.5 percent) and Thai PTT Exploration and Production (8.5 percent). The other investors in block 52/97 are PetroVietnam Exploration and Production (30 percent), Mitsui Oil Exploration Co. Ltd. (19.6 percent) and PTTEP (7 percent).

Work is also under way at the country’s biggest ever gas discovery at Ca Voi Xanh in the central region. PetroVietnam signed an agreement with Quang Nam's provincial government in late March to begin selecting sites for petrochemical and power plant projects, which will consume natural gas from the field in the East Sea. The local provincial government has pledged to push forward infrastructure development in the area to support the projects, the company said.

 
 
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