PetroVietnam Gas embarks on $1.27bn pipeline
Company to invest $4.5bn in 15 other major projects up to 2021
HO CHI MINH CITY -- PetroVietnam Gas, or PV Gas, is preparing to build a $1.27 billion pipeline in the Mekong Delta this year after receiving a government investment certificate last month.
The project is a joint venture among PV Gas, Japan's Mitsui Oil Exploration and Thailand's PTT Exploration & Production.
The pipeline runs 431km, of which 292km are offshore, and it connects Block B to Vietnam's Kien Giang Province and Can Tho city. It will have capacity for 20.3 million cu. meters of gas, along with onshore infrastructure including a landfall station, shutoff stations, the Kien Giang gas distribution station and the O Mon gas distribution center in Can Tho.
The facility, set to become operational in 2020, will fuel two power plants until 2040 with a combined capacity of 3,660 megawatts. The project is expected to yield some 100 billion cu. meters of gas and 12.65 million barrels of condensate.
In 2010, the giant gas project was put in the hands of PV Gas, Chevron from the U.S., Mitsui Oil Exploration and Thailand's PTTEP.
Five years later, state-owned PetroVietnam, the largest shareholder in PV Gas, took over Chevron's stake after the two companies failed to reach agreement on pricing. Work resumed last year on Block B, and will cost $6.8 billion over 20 years. The infrastructure will include a technology center, 46 wellheads, an accommodation platform and a condensate tank, and it will involve drilling 750 wells.
PV Gas also plans to invest $4.5 billion in 15 other major projects in the 2017-21 period. PV Gas targets 5.26 trillion dong ($232 million) in net profit for 2017 from 51.4 trillion dong in revenue -- year-on-year decreases of 26.7% and 15%, respectively, based on an assumed oil price of $50 per barrel. In the first quarter, the company reported 14 trillion dong in revenue, achieving 30% of the full-year target, along with 1.4 trillion dong in net profit, or 28% of the target.