ExxonMobil to kick off multi-billion dollar gas-to-power complex in October

At a working session with leaders of the Management Board of Dung Quat Economic Zone, the representative of ExxonMobil confirmed that the corporation is preparing the necessary conditions to implement the construction. At present, the corporation has carried out the land survey and took soil samples to conduct the environmental impact report.

The investor urged relevant authorities to complete other procedures so that it can implement the project soon.

The exact amount of investment capital has not been released, but initial information suggested that the gas-to-power complex could carry a price tag of $20 billion. However, Vietnam's state-run oil and gas group PetroVietnam, the co-investors of the project, referred to $10 billion.

ExxonMobil and PetroVietnam signed a memorandum of understanding for the project in 2013. The project is believed to have high feasibility thanks to the good reputation of the investor and the readiness of the local authorities.

According to the plan, the construction will be implemented in the two provinces of Quang Nam and Quang Ngai. Notably, the landfall location of the gas pipeline stemming from Blue Whale gas field and the gas processing plant will be located at Chu Lai Open Economic Zone (EZ) in Quang Nam. Besides, four more gas-to-power plants to be fuelled from the same field, with a total generation capacity of 3,000 megawatts, will be divided equally between Quang Nam’s Nui Thanh district and Quang Ngai’s Dung Quat EZ.

ExxonMobil expects to exploit 8-9 billion cubic metres of gas per year, 1-3 billion cubic metres of which will go to Dung Quat refinery for processing.

Once the complex comes into operation, it will create opportunities for economic development of Vietnam in general and Quang Nam and Quang Ngai provinces in particular, as well as investment opportunities aiming to benefit from the Blue Whale project.

Notably, according to the plan, PetroVietnam will invest a gas processing plant in Chu Lai Open Economic Zone, while the other gas fired power plants will be simultaneously invested in both Quang Nam and Quang Ngai. No specific information about these projects has been released yet, however, it is sure that when the gas-to-power complex comes into operation, these projects will also be implemented.

Singapore-based Sembcorp had planned to develop a coal-fired power plant with a total investment capital sum of $2.5 billion in Quang Ngai. According to the initial plan, the construction will be kicked-off in 2017 so that the first generator can come into operation in September 2020, and the second unit in March 2021.

However, when the investor found out about the Blue Whale project, it abruptly asked to change the project’s implementation technology from thermal power to gas-fired power and delay the construction time at least until 2023 or 2024. This means that the pace of the project will be largely dependent on the progress of the Blue Whale gas project.