Petrovietnam signs implementation deals for long-delayed $12 bln gas-to-power project

State-owned Petrovietnam signed implementation deals with Japanese and Thai partners Monday for a $12 billion gas-to-power project at Block B-O Mon.

The signing marked a resumption of the long-delayed project, after Petrovietnam was assigned as the investor of the project in June, replacing state utility Vietnam Electricity (EVN).

The state-run oil and gas major signed a heads of agreement (HoA) with Mitsui Oil Exploration Co., Ltd. (Moeco), an oil exploration subsidiary of Japan’s Mitsui & Co., and Thailand’s national petroleum exploration and production company PTT Exploration and Production (PTTEP). It also signed with EVN’s Power Generation JSC 2 a minute of agreement for gas sales agreement (GSA) for the O Mon 1 power plant.i

Two Petrovietnam subsidiaries - its technical arm PTSC and the Phu Quoc Petroleum Operating Company (Phu Quoc POC) - and Malaysia-based engineering and construction solution provider McDermott Asia Pacific received deals under which they will be contractors for the project’s EPCI#1 package.

The $12-billion project includes sub-projects for developing Block B (upstream); Block B – O Mon pipeline (mainstream); and four gas-to-power plants – O Mon 1, 2, 3, 4 – (downstream). It is expected to exploit 5.06 billion cubic meters of gas a year, powering four power plants, a part of O Mon Power Center, with a total capacity of 3,800 MW.

Speaking at the event, Prime Minister Pham Minh Chinh said he expected the project to boost socioeconomic growth in the Mekong Delta, especially Can Tho city and the provinces of Ca Mau and Kien Giang. The project would also play a key role in national defense and sovereignty protection while helping the country realize its net-zero emission commitment by 2050, he added.

Block B is the country’s second largest gas project after Ca Voi Xanh, or Blue Whale. Petrovietnam estimates that a total investment of $10 billion is needed to complete the Block B project, about 400 kilometers from Can Tho city. The corporation has pledged to deliver the first gas flow from Block B in Q4/2026.