Mitsui Oil Makes FID on Vietnam Gas Project

Mitsui Oil Exploration Co., Ltd. (MOECO) and its business partners have made a final investment decision on the Vietnam Block B project, an integrated development project involving an upstream gas field and a pipeline to link it to a gas-fired thermal power plant complex. MOECO said in a news release that the project’s production capacity is estimated to be 490 million cubic feet per day, with production scheduled to begin by the end of 2026. In addition to the development of the upstream gas field, the Block B Project will also include a midstream development for gas transportation.

For the upstream field development, the partners are operator Vietnam Oil and Gas Group (PVN), with a 42 percent stake, its subsidiary PetroVietnam Exploration Production Corporation Limited (PVEP) with a 27 percent stake, MOECO Vietnam Petroleum Co., Ltd. (MVP) / MOECO Southwest Vietnam Petroleum Co., Ltd. (MSVP) with a 23 percent stake, and PTTEP Southwest Vietnam Company Limited / PTTEP Kim Long Vietnam Company Limited with an eight percent stake.

For the midstream business, the partners are operator PVN with a 29 percent stake, its subsidiary PetroVietnam Gas Joint Stock Corporation (PV Gas) with a 51 percent stake, MOECO Southwest Vietnam Pipeline B.V. (MSPL), with a 15 percent stake, and PTTEP Southwest Vietnam Pipeline Company Limited with a five percent stake. MVP and MSVP are subsidiaries of MOECO, each a joint venture with the Japan Organization for Metals and Energy Security (JOGMEC), while MSPL is a wholly owned subsidiary of MOECO. PTTEP Southwest Vietnam and PTTEP Kim Long Vietnam are subsidiaries of PTT Exploration and Production Public Company Limited (PTTEP), a Thai national oil and gas company.

MOECO subsidiaries’ share of development costs for the project, which mainly consists of offshore installations and pipeline construction, will be approximately $740 million (JPY 110 billion), according to the release. The Block B Project will be the “next-generation core business” for MOECO, the company said, adding that it is expected to yield stable earnings in the long-term. MOECO said aims to contribute to clean energy supply and energy transition in the Southeast Asia region through the development of gas fuel supply for power generation of the Block B project MOECO is an oil exploration subsidiary of Japan’s Mitsui & Co. and specializes in natural gas. It has projects in Vietnam, Thailand, and Indonesia.

Mitsui and its subsidiaries have been active in the energy and emission reduction space in the past months. The company in September 2023 formed a joint venture (JV) with Galp SGPS SA to produce renewable diesel and sustainable aviation fuel (SAF) in Portugal. The JV will build a production facility within the Galp-operated Sines refinery in the Setubal district, with the project expected to start commercial operations in 2026.

The facilities will be designed to switch between renewable diesel production and SAF production, according to Mitsui. The renewable diesel will be in the form of hydrotreated vegetable oil (HVO). In the same month, Petroliam Nasional Bhd. (Petronas) signed a term sheet with Mitsui OSK Lines Ltd. (MOL) and MISC Bhd. for a potential JV that would advance the commercial-scale deployment of liquefied carbon dioxide (CO2) carriers in Malaysia.