PetroVietnam signs major gas power contracts

On October 30 in Hanoi, in the presence of Prime Minister Pham Minh Chinh, the Vietnam National Oil and Gas Group (PetroVietnam) signed contracts with partners and initiated the Lot B - O Mon gas power project chain, marking a significant step in this critical project chain.

Documents signed included the Lot B Framework Agreement, the agreed-upon content of the O Mon I Gas Sales Contract, and the awarding of the EPC#1 Contract. These set the stage for PetroVietnam and its partners to continue the implementation of component projects.

The signing ceremony was attended by representatives from various ministries and departments and leaders from central agencies and some provinces and centrally-run cities. It also saw the presence of ambassadors from Japan and Thailand, as well as executives from PetroVietnam and partner companies such as the Mitsui Group and the MOECO Group from Japan, the PTTEP Group from Thailand, and Vietnam’s Power Generation Corporation 2 (EVNGENCO2).

In his address to the ceremony, Prime Minister Chinh emphasized that the project is important and meaningful for the oil and gas sector and has received attention from all levels, sectors, localities, and the people in areas it passes through.

PetroVietnam General Director Le Manh Hung told the ceremony that the Lot B - O Mon gas power project chain is a domestic project that includes the Lot B field development project (upper stream), the Lot B - O Mon pipeline project (midstream), and the O Mon I, II, III, and IV gas power plants (downstream), with investment of nearly $12 billion. Expected gas production is approximately 5.06 billion cu m per year, providing the four power plants at the O Mon Power Center with a total expected installed capacity of up to 3,800 MW.

The Prime Minister also said that this is a critical project for the State, not only bringing in significant revenue, of over $30 billion, with investment parties totaling over $11 billion, but also contributing to strengthening national security and defense and asserting sovereignty over seas and islands. At the same time, the component projects in the chain during construction will create additional infrastructure and thousands of jobs, and contribute to economic restructuring in many localities.

In the context of increasingly strong economic growth and traditional power sources being limited, gas thermal power projects are an essential factor in ensuring national energy security. Along with this, the implementation of the Lot B - O Mon gas power project chain will be an important step for PetroVietnam to contribute to fulfilling Vietnam’s commitment at COP26 with the goal of reducing carbon emissions to cope with climate change. The Power Development Plan VIII (PDP8) aims for a “greener”, “cleaner” energy system, in line with the global trend of energy transition.

Mr. Hung affirmed that with determination, leadership, and strong guidance from the Party, the government, and the Prime Minister, as well as with support and assistance from central and local ministries and sectors and cooperation and sharing by partners, the project chain will achieve important and solid milestones, steadily moving towards its goals.