Japan's Tokyo Gas Co., Ltd. planned to partner state-owned PetroVietnam Gas Joint Stock Co. (PV Gas) and other local firms to set up a joint venture company in Vietnam to tap to an anticipated increase in demand for liquefied natural gas (LNG) in the Southeast Asian country, a Japanese media said Saturday.
The proposed joint venture could be set up as early as this month, with Tokyo Gas likely to invest a few hundred million yen ($1 million is worth around JPY 100.6 million) to acquire an interest of 10 to 20 percent as well as representation on the board of the new firm, Nikkei Asian Review said July 9. PV Gas – a subsidiary of national oil company Vietnam Oil and Gas Group (PetroVietnam) – will hold a majority interest in the joint venture, while other potential partners include a local construction firm.
The partners intends to launch feasibility studies to assess the possibility of constructing an LNG plant for storage and pipelines to create a supply network. Tokyo Gas' knowledge of the LNG industry would help the joint venture in building facilities and operating an energy supply business. The size of the joint venture could expand if results of the feasibility studies appear promising, for which Tokyo Gas will probably dispatch additional employees from Japan.
The Japanese firm is eyeing overseas energy markets particularly in growing economies such as Vietnam, where gas consumption is likely to increase further and the country is looking to supplement energy supplies generated by its coal-fired and hydroelectric facilities.
Earlier this year, the Vietnamese gas firm said PV Gas' President and CEO Duong Manh Son and Tokyo Gas' President Michiaki Hirose inked an agreement March 4 in Tokyo to extend the Memorandum of Understanding to collaborate on developing the LNG value chain in Vietnam. Both companies also agree to jointly facilitate and promote international investments in upstream assets.
Data gathered from the 2016 edition of BP Statistical Review of World Energy revealed that Vietnam consumed 377.82 billion cubic feet (Bcf) or 10.7 billion cubic meters (Bcm) of natural gas in 2015, up from 360.2 Bcf (10.2 Bcm) in 2014 and 300.1 Bcf (8.5 Bcm) in 2011.
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