Tokyo-headquartered Mitsui & Co. has finalized an investment decision to develop a gas field 330 kilometers off Vietnam’s southern coast, with its share of development costs estimated at $740 million.
The firm said it will invest $560 million in an upstream component project and another $180 million in a pipeline (midstream) project that will provide gas for Vietnam’s power plants.
Mitsui will make the investment through its subsidiary Mitsui Oil Exploration Co., Ltd. (MOECO), which, in turn, will form a joint venture with the Japan Organization for Metals and Energy Security (JOGMEC) to carry out the upstream project.
The project will have a production capacity of 490 million cubic feet per day, is slated to start operations by the end of 2026 and will run for 20 years.
MOECO holds a 23% stake in the gas field. State-owned Petrovietnam has 42%, Petrovietnam Exploration Production 27%, and Thailand's PTT Exploration and Production Public Company (PTTEP) the remaining 8%.
For the gas transportation project, the partners will build a pipeline with a total length of 433 km, 103 km of it onshore. It will have a maximum transportation capacity of 640 million cubic feet per day. MOECO will make the investment through a wholly-owned subsidiary.
In this midstream project, MOECO holds a 15% stake while PV Gas Corp., a Petrovietnam subsidiary, has 51%, Petrovietnam has 29% and PTTEP has 5%.
Mitsui has identified the Global Energy Transition as a Key Strategic Initiative in its Medium-term Management Plan 2026, the firm said in a release.
“Mitsui considers that natural gas and LNG will play an important role during this transition and sees them as what we call real solutions. The Block B Project will contribute to the sustainable transition to a decarbonized society through the development of gas fuel supply for power generation,” it said.
Meanwhile, Petrovietnam and its subsidiaries signed contracts last Friday with MOECO and PTTEP for their long delayed $12 billion power project at Block B-O Mon.
Petrovietnam will be the sole buyer of the gas produced from Block B and will on-sell the entire volume to the 3,810-MW O Mon power complex located in the Mekong Delta city of Can Tho.