PetroVietnam Announces $1B Gas Pipeline Project

Petrovietnam Gas Corp. (PV Gas), Chevron Vietnam Ltd. (US), Mitsui Oil Exploration Co. Ltd. (MOECO) (Japan), and PTT Exploration and Production Public Co. Limited (PTTEP) (Thailand) on Thursday signed a business cooperation contract (BCC) for the Block B Gas Pipeline Project, with the participation of representatives of the Government of Vietnam and related ministries and agencies. The ceremony was held in Petrovietnam's Head Office in Hanoi.

The Block B Gas Pipeline Project, which will be operated by PV Gas, will have a total investment of approximately US$1 billion, of which PV Gas holds 51 percent, and foreign partners including Chevron, MOECO and PTTEP hold 49 percent. The project, when completed, will transport natural gas from Block B&48/95 and Block 52/97, off the Southwest coast of Vietnam, with a capacity of 18.3 million cubic meter per day (equivalent to 6.4 billion cubic meter per year) to power plants at the O Mon Power Complex, Tra Noc of Can Tho City (total capacity of 3,000 MW), and to the power and fertilizer plants in southernmost province of Ca Mau Province, as well as to other consumers in the South Western Region.

The 400 km pipeline will be the longest pipeline in Vietnam, with an offshore section of 246 km and 152 km on shore, reaching Can Tho City through the Provinces of Hau Giang, Kien Giang, Bac Lieu, and Ca Mau.

The signing of the BCC to develop the Block B Gas Pipeline Project among PV Gas, Chevron, MOECO, and PTTEP will help to ensure the country's energy security and to promote industrial development in the Mekong Delta. The project will also save a significant amount of foreign currency for Vietnam on fuel imports, create more employment for the community, protect the environment by using a clean fuel, ensure a stable source of power, and open opportunities to connect with the gas pipeline systems of other countries in the region.

At the ceremony, PV Gas President & CEO Do Khang Ninh said, "I am proud to say that today's signing ceremony is the result of a close and successful relationship and cooperation among partners. This agreement will contribute to Vietnam's energy development in the future and to PV Gas's leading role in Vietnam's gas industry."

Chevron Vietnam Ltd. President Hank Tomlinson said, "Today marks the start of a long-term pipeline partnership. We look forward to working closely with our partners to move the Vietnam Gas Project forward in 2010 and the following years."