Petrovietnam earmarked as new investor for long-delayed gas power projects in Can Tho

Ministries in Vietnam have asked Prime Minister Pham Minh Chinh to transfer two delayed gas-fired power projects in the Mekong Delta from state utility Vietnam Electricity (EVN) to Petrovietnam.

Deputy Prime Minister Tran Hong Ha agreed with this proposal on Monday at a meeting held to discuss measures to tackle obstacles facing Vietnam’s major Block B gas project in the south, which will supply gas for the O Mon power complex in Can Tho city.

The key power complex includes the gas power plants O Mon 3 and O Mon 4 developed by EVN.

The Block B gas project will include gas exploration from fields in the Malay-Tho Chu Basin off southwest Vietnam and a pipeline system to provide gas for the power complex, which plays an important role in energy security in the south. However, the three projects (Block B and the two power plants) have been delayed for years due to financial difficulties and disagreements about gas exploitation and transportation.

EVN, the investor in the two power plants, is facing difficulties utilizing official development assistance (ODA) capital sources for O Mon 3, and mobilizing commercial loans for O Mon 4. The state utility is also facing problems in terms of connecting with the national grid to ensure consumption because the cost of gas-fired power is higher than the prices EVN charges customers.

"They cannot be delayed forever," said Deputy PM Ha, referring to the two projects. There must be a way out, and ministries and relevant corporations must sort it out, he underlined.

The Deputy PM agreed with the proposal for the projects to be transferred to state-owned Petrovietnam, or PVN - the country’s leading oil and gas group. He asked the Ministry of Industry and Trade to work with EVN to understand its problems and report to the PM.

Ha also said any work that has been completed by EVN should be handed over to Petrovietnam. The Committee for Management of State Capital at Enterprises and the industry and trade ministry have been tasked to deal with financial and technical issues during the transfer and report any issues beyond their authority to the PM.

The Ministry of Planning and Investment has been made responsible for guiding the People's Committee of Can Tho city on the transfer of the two projects and proposing a plan to transfer the O Mon 3 project’s ODA to Petrovietnam.

The oil and gas group has been assigned to complete procedures and mobilize capital to complete investment preparations and select contractors to carry out the two projects. Petrovietnam must calculate the distribution of gas in the Block B and O Mon systems to ensure efficient public investment in the significant projects.

Block B is the country’s second largest gas project after Ca Voi Xanh, or Blue Whale. Petrovietnam estimates a total investment of $10 billion is needed to complete the Block B project, about 400 kilometers from Can Tho city.

In mid-May, Petrovietnam’s Phu Quoc Petroleum Operation Company, operator of the major Block B project, secured project management support service deals from service suppliers.

The service suppliers are a consortium between international firm Orion Petroleum and Petrovietnam Logistics Services JSC; a consortium between Petrovietnam’s PVChem and Amoria Bond; and Oil and Gas Drilling Investment Service Enterprise under Petrovietnam Drilling and Drilling Services Corporation.