On March 28, 2024, Vietnam Oil and Gas Group ( Petrovietnam ) and its partners held a signing ceremony of commercial agreements for the Block B - O Mon gas and power project chain. Attending the ceremony, on behalf of Vietnam Oil and Gas Group (Petrovietnam), there were Chairman of the Board of Directors Le Manh Hung; General Director Le Ngoc Son; members of the Board of Directors; Deputy General Director of the Group; and representatives of leaders of member units, branches, and project management boards.
On the side of Vietnam Electricity Group (EVN), there was Mr. Ngo Son Hai - Deputy General Director.
On the side of MOECO Company, there is Mr. Harada Hidenori - General Director.
On the side of Mitsui Group, there was Mr. Maruyama Yasuchika - Director of Sustainable Energy Development Division.
On the side of the Thai Petroleum Exploration and Production Corporation (PTTEP), there was Mr. Piya Sukhumpanumet - Deputy General Director.
The Block B - O Mon gas and power project chain is very large in scale in Vietnam, including many component projects (upstream development projects, pipeline projects and downstream power plant projects), with the participation of many investors (from foreign partners from Japan and Thailand such as MOECO, PTTEP, Marubeni to Vietnamese investors such as Petrovietnam, PVEP, PV GAS, EVNGENCO2, WTO). The investment scale of the entire project chain is up to nearly 12 billion USD. Block B, 48/95 and 52/97 (abbreviated as Block B) are located in the offshore area of Southwest Vietnam, in the Malay - Tho Chu Basin depression on the continental shelf of Vietnam, about 300 km from the coast of Ca Mau , about 400 km from the O Mon Power Center, with a sea depth of about 77 meters.
The entire gas source exploited from Block B will be transported by pipeline to O Mon district, Can Tho city to supply gas to O Mon I, O Mon II, O Mon III and O Mon IV power plants (with a total capacity of about 3,810 MW), and can also provide gas for the Ca Mau area. During the stabilization period, Block B will provide power plants with about 5.06 billion m3 of gas each year to produce about 22 billion kWh of electricity, meeting part of the energy demand for Vietnam's economic development in the coming time.
Previously, on October 30, 2023, after a long period of slow implementation, with the strong direction of the Government, the Prime Minister, and the determination of Petrovietnam and all Parties in the Project Chain, the relevant Parties in the Project Chain signed the Framework Agreements, the Minutes of Agreement and awarded the upstream EPC Package No. 1. On that basis, on March 28, 2024, after negotiations in the spirit of harmonious interests, shared risks and cooperation for mutual development, Petrovietnam and the Parties agreed to sign the Agreements for the Project Chain. This is the result of great efforts and endeavors of PVN and the investors, especially the strong and timely direction of competent State agencies. The successful signing of the agreements for the Block B Gas and Power Project Chain contributes to ensuring the overall progress of the entire project chain. At the same time, the project chain will be an important resource, a stepping stone to support the implementation of the Vietnamese Government's commitment at COP26 with the goal of reducing carbon emissions to respond to climate change, and the Power Plan VIII is built towards a "greener", "cleaner" energy system, in line with the global trend of energy transition that is taking place strongly.
The signed agreements include:
1. Gas Sales and Purchase Agreement (GSPA) Block B with terms of commitment to purchase and sell Block B gas between the Mine Owner, including the Sellers, Vietnam Oil and Gas Group, Oil and Gas Exploration and Production Corporation, MOECO Company (Japan), PTTEP Company (Thailand), and the Buyer (Vietnam Oil and Gas Group). The Parties commit to deliver and receive about 5.06 billion m3 of Block B gas each year during the Stabilization Period.
2. Vietnam Oil and Gas Group hires Transporters (including the Parties: Vietnam Gas Corporation, Vietnam Oil and Gas Group, MOECO Company, PTTEP Company), according to the terms and conditions committed in the Gas Transportation Agreement (GTA) of Block B, to transport the entire amount of Block B gas (about 5.06 billion m3/year) to shore, through the landing station in Kien Giang and the onshore pipeline from Kien Giang to O Mon (Can Tho).
3. Connection, Operation and Service Agreement (TOSA) between the Field Owners (including the Parties: Petrovietnam, PVEP, MOECO, PTTEP) and the Transporter (including the Parties: PV GAS, Petrovietnam, MOECO, PTTEP). This is a service contract to connect the Transporter's equipment to the Block B gas exploitation platform and the Field Owner will be responsible for providing related services to support the Transporter throughout the contract term.
4. The amount of gas from Block B, after reaching the shore, will be allocated and supplied by Petrovietnam to Power Plants in the O Mon area. The Block B gas sale contract between the Seller (Vietnam Oil and Gas Group) and the Buyer (EVNGENCO2) will supply part of Block B gas to the O Mon I Power Plant, with an annual gas volume of about 1.265 billion m3 during the stabilization period.
In order to implement the project chain in a synchronous manner and achieve the set goals and plans, the difficulties and challenges that Petrovietnam and the relevant parties must face are still very large. These include bottlenecks in policy mechanisms for mobilizing and operating the power system for power plants consuming Lot B gas; issues related to ODA capital that will be used for the O Mon III power plant project; optimization and shortening of approval procedures for the progress of the O Mon IV power plant project to meet the requirements of the project chain; or the negotiation and signing of power purchase agreements for power plants using Lot B gas.
According to Petrovietnam General Director Le Ngoc Son, as a participant in the project chain, Petrovietnam always considers the operation of Block B Project a very important task that needs to be successfully implemented. The development of Block B Project will contribute a significant source of revenue to the State budget and socio-economic development for the provinces in the Southwest region, contributing to ensuring national energy security.
On behalf of Petrovietnam's Board of Directors, as the Investor of O Mon III and O Mon IV Power Plants, General Director Le Ngoc Son expressed his gratitude and hoped to continue receiving support from Vietnam Electricity Group (EVN) in the process of negotiating and agreeing on Power Purchase Agreements, as well as coordinating with the competent State agencies in amending the necessary Circulars to ensure that the Power Plants using Block B gas consume all the gas as committed in the related gas purchase agreements. Petrovietnam will continue to make every effort with the highest determination to implement the work items in the project chain in accordance with the direction of the Prime Minister, at the same time, ensuring synchronization of progress between stages and component projects to ensure the economic efficiency of the project chain, striving to have the first gas flow of the project as soon as possible.
According to Petro Times.
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