HÀ NỘI – Việt Nam National Oil and Gas Group, better known as PetroVietnam, on Friday signed with its partners a letter of agreement on wellhead gas price and transportation tariff of Block B&48/95 and Block 52/97.

The consortium partners include PetroVietnam Exploration Production Corporation (PVEP), PetroVietnam Gas Joint Stock Corporation (PV Gas), Mitsui Oil Exploration Company (MOECO) and PTT Exploration and Production (PTTEP).

Block B is a package of three component projects including well development project for Block B&48/95 and Block 52/97, Block B-Ô Môn gas pipeline project and gas turbine power projects in Ô Môn, Kiên Giang Province.

“This [agreement] marks a significant milestone towards making a positive final investment decision by the parties and for bringing the project into production with the first gas target by the end of 2021,” said Nguyễn Vũ Trường Sơn, PetroVietnam’s President and CEO.

Sơn said Block B&48/95 and Block 52/97 had a geological complexity that required a development methodology similar to that in the Gulf of Thailand, which is different from fields in Việt Nam. However, he pledged to implement the project on schedule and secure the project’s operational sustainability.

Block B&48/95 and Block 52/97 is in the Malay-Thổ Chu basin and is about 280km offshore South-West from Cà Mau, Việt Nam.

Since 1997, Unocal/Chevron, MOECO, PTTEP and PVEP have carried out exploration and acquisition activities at Block B&48/95 and Block 52/97. A total of 30 exploration and appraisal wells have been drilled, of which 23 successful wells delivering gas were discovered at Kim Long, Cá Voi, Ác Quỷ, Vàng Đen and Thiên Hà fields.

The contractors made the Hydrocarbon Initially In-Place (HCIIP) for these fields and obtained the Prime Minister’s approval in 2010.

In February 2015, PetroVietnam acquired Chevron’s interest in those blocks and the pipeline project and became the official operator of the Block B in June 2015.

Speaking at the signing ceremony, Cao Quốc Hưng, Deputy Minister of Industry and Trade said Block B-Ô Môn project is a National Strategic Petroleum Project and one of the two largest gas projects of Việt Nam to date.

“The project will deliver an essential source of gas for the stable development of the South Western area of the South of Việt Nam. It will enable the development of local industries and significantly contribute to the energy security of Việt Nam and boost local socio-economic development,” Hưng said.

With the plateau gas production of 5.06 billion cubic metres (bcm) per year, the project will supply a critical source of natural gas to Ô Môn Power Centre and Cà Mau Gas-Power-Fertiliser Complex.

The total revenue over the life of the project is expected to be about US$47 billion, of which $18 billion will be contributed to the State budget.

According to Mitsuo Hidaka, President and CEO of MOECO, the next few months will be critical and he called on the Vietnamese Government’s support to finalise the Government Guarantees and Undertakings (GGUs) as this is of the top priority for foreign partners to take final investment decision.

On behalf of Ministry of Industry and Trade (MOIT), Hưng said MOIT and relevant ministries commit to accelerate the finalization of GGUs negotiation for the project and submit to the Government for approval.

At the same time, MOIT will also instruct the Electricity of Vietnam (EVN), and PetroVietnam to reach the agreement on Gas Sales Agreement in time. – VNS