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Gas industry

Vietnam Deal Nears Completion: BP and Statoil Seek to Sign $580 Million Gas Pipeline Contract

Strategic Insights

— 1 min read

BP and Norway's Statoil are on the cusp of finalizing a business cooperation contract with Vietnam for a $580 million natural gas pipeline, a key component of a $1.5 billion integrated project in the Nam Con Son basin. The deal, which has been in the works since September, aims to tap into the region's estimated 2.07 trillion cubic feet of commercially viable gas reserves. With tax issues resolved and an investment license expected to be issued shortly after the contract signing, the project is poised to move forward with significant implications for Vietnam's energy landscape.

Key Takeaways:

  • The BP-Statoil alliance has reached a tentative agreement with the Vietnamese government to sign a business cooperation contract for a $580 million natural gas pipeline.
  • The pipeline is part of a $1.5 billion integrated project, which involves gas from Vietnam's Lan Tay and Lan Do fields in the Nam Con Son basin.
  • BP has a 26.67% stake in the overall project, while Statoil holds 13.33%, India's ONGC Videsh has a 45% stake, and state-run Petrovietnam has a 15% stake.
  • The foreign consortium estimates Nam Con Son has reserves of 2.07 trillion cubic feet, which would be commercially viable for 20-25 years.
  • The peak pumping rate envisioned for the pipeline is 94.5 billion cubic feet per year.
  • Still to be agreed upon are a commercial accord covering transportation of the gas and another on an additional power plant to receive it.
  • The project would be the main element of the midstream part of the integrated project, marking a significant development in Vietnam's energy sector.

Statistics:

  • Estimated gas reserves in the Nam Con Son basin: 2.07 trillion cubic feet
  • Commercially viable gas reserves: 20-25 years
  • Proposed peak pumping rate: 94.5 billion cubic feet per year
  • Total investment in the integrated project: $1.5 billion
  • Value of the gas pipeline contract: $580 million

Sources:

  • "BP, Statoil near Vietnam deal" by Oil Daily, November 21, page 9.

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