The Block B project is made up of an upstream gas field, located 330km offshore southeast Vietnam, along with a 433km long associated pipeline that will connect the field to a gas-fired thermal power plant complex
Mitsui’s share in the Block B gas development project will be $740m. (Credit: QR9iudjz0/Freeimages)
Mitsui & Co. (Mitsui) has taken a final investment decision (FID) for the development of Block B gas development project in Vietnamese waters, in which the group’s share of investment totals to around $740m.
The Block B project includes an upstream gas field, located 330km offshore southeast Vietnam, along with a 433km long associated pipeline that will connect the field to a gas-fired thermal power plant complex.
Mitsui is taking part in the project through its 100% owned subsidiary Mitsui Oil Exploration (MOECO). The latter via its subsidiaries, which are joint ventures with JOGMEC, holds a stake of 23% in the gas field.
According to Mitsui, the group has wrapped up awarding associated contracts alongside its partners pertaining to the integrated development project.
Vietnam Oil and Gas Group (PVN) has an operating stake of 42% in the upstream part of the project. PetroVietnam Exploration Production (PVEP), which is a subsidiary of PVN, holds a 27% stake while Thailand-based PTT Exploration and Production (PTTEP) has an 8% stake.
PetroVietnam Gas (PV Gas), a subsidiary of PVN has a 51% stake in the pipeline while PVN holds a 29% stake. MOECO, through a 100% subsidiary has a 15% stake, while PTTEP owns a stake of 5%.
The upstream project involves the drilling of 37 wells before production and 861 wells in total through project life. The aim of the project is to draw 490 million cubic feet per day (mmcf/d) of gas, which is around 84,500 barrels of oil equivalent per day (boe/d).
Mitsui’s share in the development of the gas field will be $560m. In the pipeline project, the group’s share will be $180m.
The pipeline will be 330km offshore and 103km onshore. Its maximum transportation capacity will be 640mmcf/d (or around 110,000boe/d).
Mitsui stated: “The Block B Project will be the next-generation core business for MOECO. MOECO has been participating in this highly competitive project from the exploration phase and the project is expected to yield stable earnings in the long-term.
“Production capacity is estimated to be 490 million cubic feet per day, with production scheduled to begin by the end of 2026.”