PV Gas set to invest $2bn in 2017
Vietnam's state-owned gas company has 60 gas projects in the pipeline
HO CHI MINH CITY -- PetroVietnam Gas Joint Stock Company, or PV Gas, plans to invest some $2 billion in over 60 gas projects in 2017, mostly in southern Vietnam.
At a press briefing on Tuesday, the subsidiary of PetroVietnam gave a rundown on its projects, which include the second stage of the $1-billion Nam Con Son pipeline, and a $300-million gas processing plant in Ca Mau province.
A $1-billion pipeline connecting (Vung Tau's Nam Con Son 1 pilneine) with the Ca Rong Do gas field, located in a part of the South China Sea disputed with China, has been re-activated with Spanish oil company Repsol, and is undergoing a feasibility study this year.
Assuming an average oil price of $50 a barrel in 2017, PV Gas expects to handle over 9 billion cu. meters of gas and to generate 51.4 trillion dong in revenue with 5.2 trillion dong in net profit -- year-on-year declines respectively of 9%, 10%, and 27%. The supply may, however, be cut if global oil prices remain depressed.
PV Gas is also planning a polypropylene plant with an annual capacity of 400,000 tons per annum that should meet national demand for the next few years.
At present, the company supplies 70% of the domestic gas market. Other players supply gas imported from Yunnan province in China. "In the next five or ten years, Vietnam's gas consumption will be mostly provided by overseas suppliers, and we have to speed up building the related infrastructures," said Le Nhu Linh, chairman of PV Gas.
According to initial reports for 2016, PV Gas revenue went up 8% to 57.4 trillion dong ($2.5 billion), while net profit increased 38% to 7.1 trillion dong. The results reflected an actual average oil price of $45 a barrel instead of the $60 planned at the beginning of the year. The company contributed 14% of PetroVietnam's revenue and 25% of its net profit last year, and will pay a 30% dividend.
PV Gas has not been listed for divestment as a state enterprise in the next four years. Possible foreign ownership is capped at 49%, and for now the government retains nearly 97% of the company. The management has said its interest would be in a foreign partner with industry experience rather than purely financial involvement.