Mitsui has announced its intention to invest approximately 84 billion yen ($560 million) to develop a gas field in southern Vietnam, as part of a project led by the country’s state oil company. The Block B project, located in Kien Giang province, involves both field development and the construction of a pipeline connecting to a gas-fired power plant. The total project costs, including associated expenses, are expected to exceed $10 billion.
Production at the gas field is scheduled to commence in late 2026, with a projected daily capacity of 490 million cubic feet. The project is being spearheaded by Vietnam Oil and Gas Group (PetroVietnam), with Mitsui group involved in exploration activities since 1996.
Mitsui’s subsidiary, Mitsui Oil Exploration, holds a 23% interest in the upstream gas field business and a 15% stake in the midstream pipeline business through local units. Financing for the project, including possible loans from entities such as the Japan Bank for International Cooperation, is under consideration.
Although Mitsui anticipates a minor impact on its profits for the fiscal year ending March 2024 due to the investment, the project has faced delays. Initially slated to commence operations in 2020, it is now expected to be delayed by over six years. Challenges in negotiations with the Vietnamese government, particularly concerning long-term gas purchase agreements and pricing, have contributed to the setback. Additionally, political instability in Vietnam, marked by the resignation of two presidents, has further complicated the project timeline.