“Vietnam Strikes Oil: Significant Progress in Key Projects, Lo B O Mon and Kho LNG.”

In its mid-year outlook report, Vietcombank Securities (VCBS) commented that in the first four months of the year, the Vietnam National Oil and Gas Group (PVN) recorded positive results in key areas. Specifically,

+ PVN completed the development of the Dai Hung field phase 3 ahead of schedule by 20 days, thanks to the efforts of a wholly Vietnamese technical team within the PVN ecosystem. This contributed to increased production and ensured a stable supply of raw materials for electricity generation during the dry season, especially for the Nhon Trach 3 and 4 power plants.

+ Urea production exceeded the plan, with two plants, Ca Mau Fertilizer and Phu My Fertilizer, meeting domestic demand and boosting exports. Ca Mau Petroleum Fertilizer Joint Stock Company (PVCFC, stock code DCM) obtained the highest export certificate to the Australian market, expanding its international market share.

+ PVN renewed the Production Sharing Contract (PSC) at Lot PM3 CAA for another 20 years with Petronas and signed a cooperation agreement with Kazakhstan’s National Oil and Gas Company in the fields of exploration and energy.

Significant progress has been made in domestic projects

Notably, Vietnam has consistently discovered oil in wells at operating and developing mines. In Lot 15-2/17 (located in the Cuu Long Basin, offshore Vietnam), the Operator has discovered an oil layer (approximately 112 meters thick) in a structure named “Golden Sea Lion.” This discovery is located near the producing Lot 15-1 and the developing Lot 15-1/05.

SK Earthon, the oil and gas exploration and production branch of South Korea’s SK chaebol, and Murphy Oil of the United States, have announced an oil discovery in the Lac Da Hong-1X well near Lot 15-1/05 offshore Vietnam.

Developing new mines and importing LNG are urgent solutions

VCBS emphasizes that with the rapid decline in domestic gas supply, developing new mines and importing LNG are crucial to ensuring energy security.

It is known that the exploitation output has been decreasing at a CAGR of 5% per year from 2013 until now. In contrast, domestic gas demand is expected to increase significantly, from 13 billion cubic meters (in 2020) to over 22 billion cubic meters (by 2025) and over 34 billion cubic meters (by 2030). The main consumers will be the electricity, chemical, industrial, and transportation sectors.

Therefore, the government is making efforts to develop domestic gas projects. According to the adjusted Power Plan VIII, Vietnam aims to strongly develop gas-fired power sources, with LNG playing a leading role.

Specifically, by 2030, the capacity of LNG-fired power is expected to reach about 22,524 MW, accounting for 9.5% to 12.3% of the total capacity of the electricity industry. In the period of 2031-2035, the LNG Long Son and Long An II power projects, which have been approved, will be put into operation, or their progress may be accelerated if conditions are favorable. By 2050, the orientation is to have LNG power plants co-firing with hydrogen with a capacity of 18,200 – 26,123 MW, LNG-fired thermal power plants converted to run on hydrogen with a capacity of 8,576 – 11,325 MW, and LNG-fired thermal power plants with CCS technology with a capacity of 1,887 – 2,269 MW.

Currently, Vietnam has put into operation the Nhon Trach 3 power plant and is expected to operate the Nhon Trach 4 power plant in November 2025. These are the country’s first two LNG-fired power plants. However, out of the 21 LNG-fired power projects by 2035 mentioned in the adjusted Power Plan VIII, only these two projects have been completed, indicating a slow implementation progress.

List of LNG-fired power plants in the adjusted Power Plan VIII

PV GAS takes the lead in importing LNG from the US

Vietnam National Gas Corporation (PV GAS, stock code GAS) is responsible for importing LNG from the US, ensuring a stable mid- and long-term supply in the context of a shifting market.

To ensure supply capacity, PV GAS plans to increase the regasification capacity at Thi Vai LNG Terminal from 5.7 million Sm3/day to 7 million Sm3/day from March 2025. This expansion aims to ensure backup capacity for EVN during the dry season peak, meet gas demand for power generation in the Southeast region, and support the testing and commercial operation of Nhon Trach 3 and Nhon Trach 4 power plants.

Additionally, PV GAS is constructing a central LNG Hub model, focusing on investing in building warehouses in the Northern and North Central regions. They are also operating an additional LNG floating storage and regasification unit (FSRU) with a capacity of 135,000 – 174,000 Sm3 LNG and a regasification capacity of 14 million Sm3/day, bringing the total regasification capacity to 22 million Sm3/day.

Regarding the direction to build an LNG storage and distribution center to serve domestic needs and the ASEAN region, the Prime Minister has requested Excelerate Energy Group to cooperate in building an LNG center in Vietnam to ensure energy security and sustainable development. Excelerate Energy has signed an MoU with PV GAS on arranging long-term LNG supply from the US to the Vietnamese market.