Vietnam PM renews call for speedier pace on Block B-O Mon gas project

Prime Minister Pham Minh Chinh has again requested state-run oil and gas giant Petrovietnam and related parties to speed up key power projects, including the Block B – O Mon gas-to-power one, to ensure national energy security.

Speaking at a Petrovietnam conference on Monday to review the group’s 2023 performance and set tasks for 2024, PM Chinh asked the Ministry of Industry and Trade to soon complete a new rule on the electricity market's operation, and the Committee for Management of State Capital at Enterprises to clear hurdles for this project chain.

The Block B gas project plays a key role in providing gas for power projects across the country’s southern region, with reserves of around 107 billion cubic meters, in 20 years. Its sharing agreements were signed in 1996 and 1999. In 2015, Petrovietnam acquired Chevron’s assets after the latter’s withdrawal.

The project is scheduled to supply the first gas flow by the end of 2026 for the O Mon 1, 2, 3, and 4 power plants with some 5 billion cubic meters per year. However, obstacles in commercial negotiations and investment approval have delayed the project for years.

In 2023, Petrovietnam signed EPC contracts to carry out its exploitation.

At the Monday conference, Petrovietnam outlined measures to put the project into operation soon.

Also at the event, PM Chinh required Petrovietnam to ensure the progress of other critical projects such as power plants Nhon Trach 3 and 4, the upgrade of the Dung Quat oil refinery, the Ca Mau gas-power-fertilizer project; to coordinate with foreign partners to raise the efficiency of the Nghi Son petrochemical complex and resume the Long Phu 1 thermal power project.

The PM tasked Petrovietnam with researching new projects and coordinating with other agencies to explore and exploit oil and gas. The group must ensure national defense and economic security for oil and gas activities, and maintain national sovereignty and territorial integrity in the South China Sea, known as the East Sea in Vietnam, and islands.

During the year, Petrovietnam operated Thai Binh 2 power plant and the Thi Vai LNG terminal with a capacity of one million tons per year.

According to the group’s report, it hit 2023 business goals, and fulfilled targets on oil and gas exploitation output, electricity, fuel and fertilizer production. Notably, the Dung Quat oil refinery produced a record of over seven million tons of products, above its design capacity of 6.5 million tons a year.

The group last year raked in revenues of VND942.8 trillion ($38.7 billion), up VND11.6 trillion ($476 million) year-on-year, and a consolidated profit of over VND54.5 trillion ($2.24 billion).

It contributed VND135.5 trillion to the state budget, beating the plan by 73%.

Also at the event, PM Chinh handed over the decision to appoint Petrovietnam CEO Le Manh Hung as the group’s chairman.