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Vietnam denies ExxonMobil project is at risk
VIETNAM
THE Vietnamese government has moved to dismiss speculation that Chinese state vessels’ repeated expeditions into Vietnam’s exclusive economic zone (EEZ) could derail the Ca Voi Xanh natural gas development.
Vietnamese Foreign Ministry spokesperson Le Thi Thu Hang told a media briefing on Sep- tember 13 that the Chinese government-owned Haiyang Dizhi 8 had illegally surveyed waters that lay “entirely within the sovereignty and jurisdiction of Vietnam”.
When asked about the Ca Voi Xanh develop- ment, which lies in Block 118 and is being led by US super-major ExxonMobil, the official said the project was continuing as planned.
The Vietnam News Service, citing data from vessel tracking website Marine Traffic, said Hai- yang Dizhi 8 was anchored about 360km from Vung Tau City on September 13.
Speculation over Ca Voi Xanh’s future stems from the fact that Hanoi is suspected of having shelved two offshore projects owing to pres- sure from China. Hanoi suspended drilling in Block 136/3, which was licensed to state-owned
PetroVietnam, Spain’s Repsol and the UAE’s Mubadala Development, in 2017. Vietnam then cancelled Repsol’s development of Block 07/03 in 2018. China’s claims to more than 90% of the South China Sea have also brought it into con- flict with the Philippines, Malaysia, Brunei and Taiwan.
The Ca Voi Xanh development includes an offshore production platform, onshore gas treat- ment facility and export pipelines to gas-fired power plants. The project is expected to generate $20bn in state revenue and supply enough feed- stock to generate 10% of the country’s electricity demand.
This is not the first diplomatic incident that Haiyang Dizhi 8 has triggered, with the ship having completed a 12-day survey of waters near the disputed Spratly Islands in July. Three China Coast Guard vessels escorted the China Geological Survey (CGS) operated ship, which was followed by nine Vietnamese vessels.
The Vietnamese government has repeatedly asked Beijing to remove the vessel from the con- tested waters.™
Magnolia terminal to supply gas to Vietnamese LNG-to-power project
VIETNAM
AUSTRALIA-LISTED LNG Ltd has struck a deal to supply gas to a province in Vietnam from its Magnolia export terminal in Louisiana, on the US Gulf Coast. The deal covers 2mn tonnes per year (tpy) of LNG to be delivered over a 20-year period, which can be extended. This locks in a buyer for 25% of Magnolia’s output, but it is the only offtake deal in place for the export project after a previous deal with another party lapsed.
The LNG will be shipped to an offshore import terminal in the coastal province of Bac Lieu, which will be linked to a 32,000-MW com- bined-cycle power plant. Once the gas has been delivered by LNG Ltd, it will be used by Viet- nam-based Delta Offshore Energy to generate electricity for use in the province. The Vietnam- ese project is anticipated to enter service in 2023.
“Delta Offshore Energy’s Bac Lieu project addresses Vietnam’s need for an LNG import terminal to provide access to growing the LNG industry as a feedstock for electricity gener- ation,” Delta Offshore Energy’s engineering
managing director, Bobby Quintos, said in a statement. “Our alliance with LNG Ltd will allow the government of Vietnam to have a stronger relationship with the US market and the long- term stability of the Henry Hub index, which fits perfectly with the Vietnamese National Power Development Plan.”
LNG Ltd has regulatory approvals in place for the Magnolia plant but has yet to announce a final investment decision (FID). Despite having offered capacity at discounted prices compared to some of its competitors, LNG Ltd has strug- gled to finalise sales agreements. The company said the US trade war with China had had an impact on these efforts. It was initially aiming to make an FID last year, but postponed it after Beijing imposed tariffs on imports of US LNG.
The Magnolia plant is approved to produce 8mn tpy of LNG. The operator has requested permission from US regulators to boost capac- ity by a further 800,000 tpy, though this is still pending.™
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