Vietnam’s gas-to-power project moves forward with planned investment nearing $12 billion

Following a final investment decision (FID) for an integrated development project, comprising a gas field off the coast of Vietnam and a pipeline connection to a nearby power plant, Vietnam Oil and Gas Group (Petrovietnam or PVN), formerly Vietnam Oil and Gas General Department, has penned multiple agreements with its partners to proceed with the project.

The partners signed commercial agreements for the Block B–O Mon gas-to-power project chain at a ceremony held in late March. This was preceded by signing framework agreements and a memorandum of understanding, awarding the stream engineering, procurement, and construction (EPC) package No. 1, and a negotiation process.

The partners in the project are Vietnam’s national oil and gas company PVN, which will be the operator of both the field and the midstream business, Mitsui Oil Exploration (MOECO), PetroVietnam Exploration Production Corporation (PVEP), PetroVietnam Gas (PV Gas), and Thai national oil and gas company PTT Exploration and Production Public Company (PTTEP).

Consisting of blocks 48/95 and 52/97 B, the Block B project entails an upstream gas field offshore Southwest Vietnam and a pipeline linking it to O Mon, a gas-fired thermal power plant complex 400 kilometers away. Situated in the Malay–Tho Chu basin of Vietnam’s continental shelf, the field has an average water depth of 77 meters.

The production at the field is scheduled to start by the end of 2026, with an estimated capacity of 490 million cubic feet per day. The total investment for the entire project chain is said to be almost $12 billion, while the project is described as the next-generation core business for MOECO.

The midstream part of the project – the pipeline – will transport gas from Block B to the O Mon district area, or more specifically, Can Tho City, to supply the O Mon I, II, III, and IV power plants, with a total capacity of around 3,180 MW. Additionally, it will be able to supply the Ca Mau area.

Once stable operation is reached, Block B is expected to produce around 5.06 billion cubic meters of gas annually to power plants, which translates into generating close to 22 billion kWh of electricity.

MOECO plans to invest nearly $560 million in the upstream business through joint investment companies with JOGMEC and approximately $180 million in the midstream business through its wholly-owned subsidiary.

As it aims to contribute to energy security in Vietnam, the project complements liquefied natural gas (LNG) developments in the country sharing the same objective. One of these developments was the arrival of the fourth LNG shipment at the Cai Mep – Thi Vai port when over 60,000 tons of LNG was imported into the country. 

Another one would be the Cai Mep LNG terminal, which is almost ready to start commercial operations. The tender for commissioning activities is scheduled to be launched this month, while awards are expected by the month’s end.