Block B

Block B Oil and Gas Project Profile

Location and Geology

The Block B Oil and Gas Project is located offshore Vietnam, specifically in the Malay-Thổ Chu Basin, within blocks B, 48/95, and 52/97. The project is situated in shallow water with a depth of approximately 246 feet (75 meters).

Project Overview

• The project involves the development of several oil and gas fields, including the Ac Quy, Kim Long, and Ca Voi fields.
• It is also known as the Vietnam Gas Project or Block B-O Mon.

Ownership and Operators

• The project is operated by PetroVietnam (Vietnam National Oil and Gas Group), which holds a 42% stake in the upstream business.
• Other key stakeholders include:
  • PetroVietnam Exploration Production Corporation Limited (PVEP): 27%.
  • Mitsui & Co., Ltd. through its subsidiaries (MOECO Vietnam Petroleum Co., Ltd. and MOECO Southwest Vietnam Petroleum Co., Ltd.): 23% in joint ventures with Japan Oil, Gas and Metals National Corporation (JOGMEC).
  • PTT Exploration and Production Public Company Limited (PTTEP): 8%.

Project Details

Upstream Development:

• The project includes the development of an upstream gas field. Mitsui & Co., Ltd. has made a final investment decision for this integrated project, which encompasses the gas field and a pipeline linking it to a gas-fired thermal power plant complex.
• The upstream development involves the construction of offshore installations, including a central production platform, living quarters platform, flare tower, and bridges. McDermott and Petrovietnam Technical Services Corp. (PTSC) are contracted for the engineering, procurement, construction, installation (EPCI), and hook-up and commissioning (HUC) services.

Midstream Development:

• The midstream component includes a 432km-long gas pipeline from the South China Sea to Can Tho, Vietnam. This pipeline is part of the Block B–O Mon project and will be operated by PetroVietnam Gas (PV Gas).
• The pipeline has a maximum diameter of 30 inches and is expected to commence operations in 2026.

Production and Reserves

• The project is expected to produce over 5 billion cubic meters of natural gas per year for approximately 20 years, with the first gas production anticipated by the end of 2026.
• The production capacity is estimated at 490 million cubic feet per day.
• The 2P reserves for gas are approximately 95,359.51 million cubic meters, with remaining recoverable reserves of about 109,889.85 million cubic meters as of 2023.

Contractors and Service Providers

• EPCI and HUC: McDermott and Petrovietnam Technical Services Corp. (PTSC).
• Design/FEED Engineering: EDG and DeepBlue for the upstream project; Dorsch Holding, PetroVietnam Engineering Consultancy, and Worley for the Block B–O Mon pipeline.
• Main EPC: Vietnam National Oil and Gas Group, with involvement from Zarubezhneft for the pipeline project.
• Project Management: PVD Invest, a subsidiary of Petrovietnam Drilling and Well Service Corp., is contracted for project management.

Investment and Costs

• The full project contract is valued at more than $1 billion, with the consortium of McDermott and PTSC executing the EPCI and HUC services.
• Mitsui & Co., Ltd.'s share of the development cost, primarily for offshore installations and pipeline construction, is approximately $740 million.
• The total development cost for the Block B Gas Development project is expected to be around $2,888 million.

Environmental and Strategic Impact

• The Block B Project is seen as a key component in the transition to a decarbonized society by providing gas fuel for power generation. It aligns with Mitsui & Co., Ltd.'s Medium-term Management Plan 2026, focusing on global energy transition.

Timeline

• Discovery: The fields were discovered in 1997 and 2002.
• Final Investment Decision (FID): Made in March 2024.
• Production Start: Expected by the end of 2026.
• Peak Production: Forecast to peak in 2027, with production continuing until the field reaches its economic limit in 2053.