PVN and the partners sign contracts to implement Block B - O Mon - gas-to-power value chain project

Mr. Le Manh Hung – PVN General Director said: that the Block B - O Mon gas-to-power project is a domestic value chain project including:

- Block B development project (upstream).

- Block B - O Mon pipeline project (midstream).

- Four gas-to-power plants in O Mon as O Mon 1, 2, 3, 4 (downstream).

The investment of this value chain project is nearly 12 billion USD.

The gas exploitation output from Block B is expected to be about 5.06 billion m3/year, supplying a complex of 4 power plants at O Mon Power Center, with a total estimated installed capacity of up to 3,800 MW.

Opinions expressed at the event said that: The Block B - O Mon gas-to-power value chain project with its characteristic needs for synchronous progress, has gone through a very long time (nearly 20 years) and many difficult, pulled negotiations between domestic and foreign partners, investment preparation process with many difficulties and obstacles in mechanisms, policies, orders and procedures. Delaying in implementation for both objective and subjective reasons, but the subjective result was the main thing.

Faced with the above reality, in the current term, the Prime Minister has inherited the results of many government terms and conducted actual surveys and listened to the opinions of all partners, discussed with the Japanese Prime Minister and the Thailand Prime Minister, and many times reported and asked for guidance from General Secretary Nguyen Phu Trong to resolve all difficulties, problems in the value chain project under its jurisdiction.

PVN General Director said: In June 2023, recognizing the difficulties of the O Mon 3 and 4 gas-to-power plants, the Prime Minister decided to let PVN officially be the investor to implement these two projects. This was a very strategic decision. At the ceremony, PVN and its partners signed important documents such as:

1/ Block B framework agreement.

2/ Minutes of agreement on the content for the O Mon 1 gas sale contract.

3/ Award of EPC Contract#1.

This was an event that created a premise for PVN and its partners to implement component projects in the coming time.

PVN and its partners have signed related contracts and implemented the Block B gas and electricity project chain - marking an important step forward in the key project chain that has lasted nearly 20 years.

Speaking at the signing ceremony, Prime Minister Pham Minh Chinh said: This is an important and meaningful event for Vietnam's Oil and Gas industry, attracting the attention of all levels, sectors, localities and people where projects go through.

The Block B - O Mon gas-to-power value chain project is a key state oil and gas project, the largest gas-to-power value chain project in Vietnam today, with an expected gas exploitation output of 5.06 billion m3/year (during the stable period), supplying 4 O Mon thermal power plants in Can Tho, with a total installed capacity of nearly 4,000 MW, playing a very important role in the strategy of balancing electricity supply and demand, ensuring national energy security, green energy conversion and socio-economic development.

The value chain project, when in operation will largely contribute to the State budget, bring profits and investment efficiency to investors, and promote socio-economic development in the Mekong Delta region, especially in Ca Mau, Kien Giang and Can Tho, creating many jobs for the labors in the oil and gas industry and in the Mekong Delta region. The early implementation of projects such as "lighthouses" at the sea will play an important role in national security, defense and protecting Vietnam's island sovereignty.

The value chain project will also play an important role, creating large resources in the roadmap for implementing net emissions to zero by 2050 as Vietnam's commitment to COP26.

According to the Prime Minister, the key points to resolve difficulties and problems are assigning the value chain project to one investor (PVN) and assigning the Ministry of Industry and Trade to amend the regulations in 3 Relevant Circulars 25, 45 and 57. The Vietnamese side will work seriously with partners in the spirit of friendship, win-win, harmonious benefits, and shared risks. From there, to achieve today's results were a signing ceremony and implementation to effectively exploit and prevent waste in this value chain project.

At the signing ceremony, the Prime Minister acknowledged, praised and appreciated the efforts of PVN and its investment partners, and the timely support and resolution of the Ministry of Industry and Trade and the State Capital Management Committee in Enterprises, ministries, agencies, localities and the Electricity of Vietnam in promoting and organizing the implementation of the value chain project. The Prime Minister highly appreciated the efforts and determinations of relevant parties in negotiating and developing the value chain project, seeking the appropriate solutions on the way for realizing the development goals of Vietnam's Oil and Gas industry and the National Energy Development Strategy to 2025, vision to 2050.

According to the Prime Minister, the value chain project has a long and difficult road ahead, with a huge amount of work. Therefore, relevant ministries, agencies, and competent authorities always pay attention, create favorable conditions, and completely resolve difficulties, obstacles, and problems to support the Value Chain Project.

For Japanese and Thai partners, Vietnamese and international oil and gas service providers, the Government of Vietnam hopes all parties will support and coordinate with PVN to carry out difficult and defiant tasks in the next stage.