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Mitsui investing US$560 million in Vietnam gas project
Estimated to cost US$10 billion, Project B is scheduled to start operations by end of 2026
Sao Da Jr 2 Apr 2024

Japan’s Mitsui & Co has taken a final investment decision for the development of Vietnam’s second-largest gas field so that the long-delayed project could start operations by the end of 2026.

The Japanese trading giant, through its subsidiary Mitsui Oil Exploration Company (Moeco), has signed related contracts for the Block B Project, located in the Malay-Tho Chu basin, southwest Vietnam.

Also known as Vietnam Gas Project, the project will comprise the development of a gas field and its pipeline system linking it to O Mon Power Complex in Can Tho City, the Mekong Delta’s hub. It is expected to be second in capacity to Ca Voi Xanh, or Blue Whale, which is being developed off the country’s central coast.

The Japanese company says: “Mitsui considers that natural gas and LNG will play an important role during this transition and sees them as what we call real solutions. The Block B Project will contribute to the sustainable transition to a decarbonized society through the development of gas fuel supply for power generation.” Mitsui has been conducting exploration in the field since 1996.

State-backed Vietnam Oil and Gas Group, or Petrovietnam, is leading the project. It estimates a total investment of at least US$10 billion is needed to complete the project.  

Mitsui says Moeco’s share of the development cost, which mainly consists of offshore installations and pipeline construction, will be around US$740 million.

Project partners

Production capacity is estimated to be 18.3 million cubic metres per day. In addition to the development of the upstream gas field, the project will also include midstream development for gas transportation.

Other partners in the development project are Petrovietnam Exploration Production Corporation (PVEP), Petrovietnam Gas Corporation (PV Gas), and PTT Exploration and Production Public Company from Thailand.

Block B is expected to reach peak production in 2046, with operations projected to last until the field’s economic limit in 2054, according to London-headquartered data analytics and consulting company GlobalData.

The Block B operator is Petrovietnam subsidiary Phu Quoc Petroleum Operation Company (Phu Quoc POC). In May 2023, the unit secured project management support service deals from service suppliers.

The service suppliers are a consortium between international firm Orion Petroleum and Petrovietnam Logistics Services; a consortium between Petrovietnam’s PVChem and Amoria Bond; and Petrovietnam Drilling and Well Services Corporation.

The deals totalled US$50 million, with services to be supplied to Phu Quoc POC across the whole lifespan of the project. The Block B - O Mon gas pipeline system will be more than 430 kilometres, the longest pipeline in Vietnam.

In addition to the O Mon Power Complex in Can Tho City, gas from Block B will also feed a power and fertilizer complex in the Vietnam’s southernmost province of Ca Mau, as well as other consumers in the Mekong Delta.

Thermal power plant

Japan’s Marubeni Corporation in February 2023 signed a heads of agreement with Petrovietnam for the latter’s supply of Block B natural gas to Marubeni’s O Mon 2 thermal power project in the O Mon complex.

The US$1.3 billion O Mon 2 power plant inside the complex with a designed capacity of 1,050 megawatts is under construction under a partnership between Marubeni and Vietnamese construction firm Vietracimex.

In addition to O Mon 2, Marubeni set up a joint venture called Quang Ninh LNG Power JSC in November 2022 to begin a feasibility study for the Quang Ninh LNG-to-power project in the northern province. The three others in the partnership are Japan’s Tokyo Gas, Petrovietnam Power Corp, and Vietnamese firm Colavi.

An investment of US$2 billion is estimated for the 1,500-megawatt power project, which will be the largest of its kind in Vietnam. It will also include an LNG terminal, storage system, and regasification facilities.

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