Gas output could triple within eight years

The State-owned Vietnam Oil and Gas Group (PetroVietnam) agreed to buy gas from the Tuna Block in Indonesia’s north Natuna Sea and also signed up to take gas from the Vietnam-Russia joint venture Vietsovpetro’s Rong field off Vietnam’s shore.

The deals could give gas field development across Southeast Asia a much-needed push after a slump in oil and gas prices in 2014 slowed investments. A third project - Exxon Mobil Corp.’s Ca Voi Xanh, or “Blue Whale” - is also moving ahead, government officials and companies said, meaning Vietnam’s gas output could triple within eight years.

“The supply would be used to meet growing power and industrial demand in southern and northern Vietnam as well as new power demand in central Vietnam,” said Mr. Andrew Harwood, Research Director of Asia Pacific upstream oil and gas at ‎Wood Mackenzie.

Vietnam’s gas production could surge to about 2,400 million standard cubic feet per day (mmscfd) in 2025, up from the current 800 mmscfd, when other new supplies and Blue Whale come online, Mr. Harwood added.

A final investment decision for Blue Whale is expected to be made in late 2019, ExxonMobil Development Company’s President Mr. Liam Mallon told the APEC summit. “The goal is to have [certain] agreements in place before the end of the year [2017], hopefully, and that would allow us to enter what we call the front-end engineering stage project,” he said.

Located to its east, Blue Whale is Vietnam’s biggest gas project, with an estimated 150 billion cu m in reserves. Under project plans, the gas would flow through an 80-km pipeline to be processed near Da Nang and then supplied to four proposed power plants in Vietnam’s central provinces, Mr. Mallon said.

PetroVietnam also signed a sales and purchase contract with Zarubezhneft to extract natural gas from the northeastern part of the Rong field, the Russian company announced on its website. Vietsovpetro - an oil and gas exploration joint venture between Vietnam and Russia - currently operates the offshore Rong field, or Block 09-1, which has so far only produced oil.

PetroVietnam also signed a memorandum of understanding (MoU) with the UK-based explorer Premier Oil to buy gas from the Tuna Block, Indonesian oil and gas upstream regulator SKK Migas said last week.

Gas from the Tuna Block, production of which is expected to be around 100-120 mmscfd of natural gas, will be delivered to the Nam Con Son Pipeline System in Vietnam via a cross-country pipeline under construction, it said. A SKK Migas spokesman reportedly said that the block’s development plan is expected to be ready in 2020 with production to start in 2023.