Signing gas sale heads of agreement for O Mon II Thermal Power Project

Abstract

On February 22, in Hanoi, the Vietnam Oil and Gas Group (Petrovietnam) and the consortium of the Trading Construction Works Organisation (WTO) and Marubeni Corporation signed the Gas Sale heads of agreement for the O Mon II Thermal Power Project.

The main purpose of this agreement is to concur key principles and provisions of the Gas Sale Agreement (GSA) to be signed and serve as a basis for the parties to accelerate the investment progress of all projects in the Block B gas - power chain. Gas receiving progress of O Mon II Thermal Power Plant will be in line with the field development of upstream Block B gas project.
Block B is located offshore Southwest Vietnam at a water depth of approximately 77 m in the Malay - Tho Chu basin of Vietnam’s continental shelf, 300 km off Ca Mau coastline and about 400 km from O Mon Electricity Center. Gas from Block B is transported via pipeline to the O Mon district area (Can Tho city) to supply the O Mon I, O Mon II, O Mon III, and O Mon IV power plants with a total capacity of around 3,180 MW.
According to Petrovietnam’s President and CEO Le Manh Hung, at its production plateau, Block B will annually supply around 5.06 billion m3 of gas to the power plants to generate roughly 21.2 billion kWh. The development of Block B will significantly contribute to the state budget, strongly support socio-economic growth of the Southwest provinces, as well as respond to the national power generation demand after 2026.
The Petrovietnam leader said, it is not easy to achieve the final investment decision (FID) in June 2023 to ensure the production progress and have the first gas flow from Block B by the end of 2026. Therefore, Petrovietnam expects oil and gas contractors, investors, and power plants to make great efforts and proactively decide for the project chain to be implemented on schedule.
At the ceremony, Mr. Nobuta Tetsuhiro, Counsellor of the Japanese Embassy in Vietnam, affirmed that the support of the government and participation of Japanese companies in the Block B - O Mon project are of great significance. The O Mon II Thermal Power Project will be an important transitional energy project, helping Vietnam fulfill its commitment of net-zero emissions by 2050, as well as tightening cooperation between Japan and Vietnam.
At the end of 2020, the O Mon II Thermal Power project was approved by the Prime Minister for the investment policy decision and granted the Investment Registration Certificate on January 22, 2021. On February 8, 2021, Can Tho city awarded the Investment Registration Certificate of O Mon II Thermal Power project to the consortium of WTO and Marubeni Corporation. The consortium has been assessed by the Ministry of Industry and Trade as having sturdy competence, experience, and especially financial capacity, ensuring capital arrangement for the project without government guarantee.
The O Mon II Thermal Power project, with a designed capacity of 1,050 MW (±10%) and the selected configuration of 2-2-1 (2 gas turbines, 2 heat recovery boilers and 1 steam turbine), ensures optimum performance, high reliability and flexibility for the operation. When put into operation, the plant is estimated to consume about 1.35 billion m3 of gas per year. Regarding the project implementation schedule, the investment will be completed and the plant will officially come into commercial operation in 2026 - 2027, ensuring compliance with the general progress of the Block B gas-power chain project.
In the future, the O Mon II Thermal Power Plant will produce an average of about 6,300 GWh/year, contributing to enhancing the power supply capacity of the national power system.