COORDINATING COMMITTEE FOR GEOSCIENCE … · 1 5th workshop of the cambodia khmer basin case studyworkshop of the cambodia khmer basin case study 29 august - 02 september, 2005 sihanouk

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55THTH WORKSHOP OF THE CAMBODIA KHMER BASIN CASE STUDYWORKSHOP OF THE CAMBODIA KHMER BASIN CASE STUDY

29 August 29 August -- 02 September, 200502 September, 2005Sihanouk Ville, CambodiaSihanouk Ville, Cambodia

COORDINATING COMMITTEE FOR GEOSCIENCEPROGRAM IN EAST AND SOUTHEAST ASIA

COORDINATING COMMITTEE FOR GEOSCIENCECOORDINATING COMMITTEE FOR GEOSCIENCEPROGRAM IN EAST AND SOUTHEAST ASIAPROGRAM IN EAST AND SOUTHEAST ASIA

Natural Gas Development and Gas Contracts Experiences from PetroVietnam

GAS DEVELOPMENT IN VIETNAMGAS DEVELOPMENT IN VIETNAMGAS DEVELOPMENT IN VIETNAM

Officially known as Vietnam Oil and Gas Corporation, PetroVietnam has developed rapidly since it was established in 1975, and its activities, through its various companies and wholly owned subsidiaries, now cover all the operations from oil and gas exploration and production to storage, processing, transportation, distribution and services.

Wholly-owned by the State, the corporation is vested with the entire oil and gas resources in Vietnam and entrusted with the responsibility of developing and adding value to these resources.

PetroVietnam, since its inception, has grown into a fully integrated oil and gas entity engaged in a broad spectrum of petroleum and related value-adding business activities in both upstream and downstream sectors. Today, with over 30 subsidiaries and associated companies, PetroVietnam operates not only within the boundaries of Vietnam but also in the global area.

PETROVIETNAM OVERVIEWPETROVIETNAM OVERVIEWPETROVIETNAM OVERVIEW

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For 13 years implementing the Law on Foreign Investment in Vietnam and 7 years the Petroleum Law, Vietnam has attracted from foreign investment over US$ 3 billion for oil and gas exploration and production. Several significant oil and gas discoveries so far quickly enhance the steady development of the industry and at the same time reaffirmed its considerable contribution to the national economy.

From 1988 up to now, PetroVietnam has signed 50 petroleum contracts with about 50 world petroleum companies both offshore and onshore of Vietnam. 27 petroleum contracts among those are still operating now.

The exploration activities in the continental shelf were mostly performed in the shallow water area (under 200m), and mainly concentrated in the CuuLong and Nam Con Son basins where there have been several commercial gas fields discovered and production is in progress. 4 gas fields (Lan Tay, Lan Do, Rong Doi - Rong Doi Tay, Emerald and Rang Dong) were appraised and being developed in the period of 2001-2005 and after 2005.

EXPLORATION AND PRODUCTION OVERVIEWEXPLORATION AND PRODUCTION OVERVIEWEXPLORATION AND PRODUCTION OVERVIEW


EXPLORATION AND PRODUCTION OVERVIEW (cont.)EXPLORATION AND PRODUCTION OVERVIEW EXPLORATION AND PRODUCTION OVERVIEW ((cont.)cont.)From 1989 to now, PetroVietnam and the PSC Contractors have actually conducted about 300,000 kilometers of 2D seismic lines and about 30,000 sq. kilometers of 3D seismic. More than 600 exploration, appraisal and production wells with total hundred thousand meters have been drilled discovering a series of oil and gas discoveries as well as a great deal of prospective oil and gas shows.

Annually oil and gas production of PetroVietnam rapidly increased and reached 16.8 millions tons and 1.6 billions cubic meters respectively. Total petroleum production is over 98 millions tones of oil and 5.6 billions cubic meters of gas.

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GAS UTILIZATION OVERVIEWGAS UTILIZATION OVERVIEWGAS UTILIZATION OVERVIEWTo utilize Vietnam's considerable gas potential effectively, PetroVietnam has actively implemented White Tiger gas utilization projects, raising gas transportation capacity onshore to 4.5 - 5 million cubic meters per day for power generation; completing the construction of and putting into operation the Dinh Co liquefied petroleum gas plant to meet domestic demand; implementing gas production and utilization projects for the gas from Nam Con Son Basin, and South West area, meeting the raw material and fuel demand of Urea power complexes in Phu My and Ca Mau.

Power generation, which is usually considered the most important market for the use of gas, is the traditional market for hydro and coal which are indigenous and have an intimate close relationship with other essential socio-economic issues. However, hydro and coal-fired power are estimated by the specialists to be limited, and they are technical-economically inferior to the gas-fired power plants. Therefore, the competition in the immediate future may be unfavorable to the gas, but in the long term, the picture will be undisputedly reversed.


GAS UTILIZATION OVERVIEW (cont.)GAS UTILIZATION OVERVIEW GAS UTILIZATION OVERVIEW (cont.)(cont.)To meet the LPG and condensate demand in domestic, the LPG Plant at DinhCo have been constructed and daily processes 5.8 mmscmd of associated gas from White Tiger Field and extracts about 800 tons LPG and 350 tonnescondensates.

To spearhead industrial growth at Dinhco, PetroVietnam has upgraded the existing White Tiger offshore facilities and constructed an onshore gas terminal in Phu My.

The pipeline for transportation of natural gas from Nam Con Son Basin to the onshore gas terminal for distribution to domestic, commercial, and industrial users in Phu My as well as other areas in the south-east of Southern of Vietnam is completed.

At present, PetroVietnam have been supplying 5 mmscmd of associated gas from White Tiger Field and 13 mmscmd of natural gas from Nam Con Son Basin to the Power Plant, Fertilizer Plant and the other industrial customers.

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TARGET OF GAS INDUSTRY DEVELOPMENT UNTILL TO YEAR 2010TARGET OF GAS INDUSTRY DEVELOPMENT UNTILL TO YEAR TARGET OF GAS INDUSTRY DEVELOPMENT UNTILL TO YEAR 20102010

Increate the Gas production up to 13 BCM in year 2010 and 18 BCM in year 2020.

Explore and utilize the Gas with high CO2 content.

Develop the Gas market to ensure that 13 BCM will be consumed whole in year 2010.

Invest and construct 03 Industry Zone utilizing Gas:- South – East area : with capacity is 9 BCM/year.- South – West area : with capacity is 8 BCM/year.- North – Thaibinh area : with capacity is 2 BCM/year.

Invest, construct, connect and operate the regional gas pipeline and national pipeline.

Expand the Gas utilization for family life, transportation and other industries

GAS CONTRACT IN VIETNAMGAS CONTRACT IN VIETNAMGAS CONTRACT IN VIETNAM

STRUCTURE OF GAS CONTRACTSTRUCTURE OF GAS CONTRACTSTRUCTURE OF GAS CONTRACTFor each Natural Gas Project, PetroVietnam, as authorized by Government, has participated around 25% - 30% of Contractor’s share.

Almost of Natural Gas produced in Vietnam have to sell to PetroVietnam at the Gas Sales Point in onshore through the GSPA, then PetroVietnam will resell to the End-Users by the GSA.

Gas Producers have to sign the TA with the Transporters to transport Natural Gas from offshore to onshore.

Long term Gas Contract.

Take or Pay provision.

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MAIN TERMS OF GAS CONTRACTMAIN TERMS OF GAS CONTRACTMAIN TERMS OF GAS CONTRACTDuration of Gas Contract.

Minimum Plateau Period.

Gas Sales Point in onshore.

Swing between MDCQ and MQ.

Proper Nominations.

Commingling and Substitution.

Accuracy limit of Measuring Equipment.

Planned Maintenance Days.

Make up Gas and Carry Forward Gas.


MAIN TERMS OF GAS CONTRACT (cont.)MAIN TERMS OF GAS CONTRACT MAIN TERMS OF GAS CONTRACT (cont.)(cont.)

Gas Price shall be calculated according to the formula.

Off-Specification Gas Price

Shortfall Gas Price.

Payment.

Late Payment.

Force Majeure.

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Build up Period Plateau Period Decline Period

MDCQ

MDCQ

MDCQ

ACQ

ACQ

ACQ

MNQ

MNQ

MNQ

MQ

MQ

MQ

GAS CHAIN IN VIETNAMGAS CHAIN IN VIETNAM

Gas Sale and Purchase Agreements between

PetroVietnam & producers

Gas Sales Agreements

Block 06.1

Block 11-2

Block 05-2

EVN/BOT/IPP

Fertilizer

Industries

Others Block

Transporters

Gas Pipeline

Gas Processing Plant

ProducersCustomers

Dry Gas

LPG Condensate

Nam Con Son Basin

Gas Sales Point

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Plateau Period

MDCQ

MNQ

Month 1 Month 2

MBQ

Month 3


Plateau Period

MDCQ

DCQ

MNQ

MQ

Year 1 Year 2

ACQ

MBQ

Documents

COORDINATING COMMITTEE FOR GEOSCIENCE … · 1 5th workshop of the cambodia khmer basin case studyworkshop of the cambodia khmer basin case study 29 august - 02 september, 2005 sihanouk