Today Alexey Miller, Chairman of Gazprom's Management Committee, and Do Van Hau, President of PetroVietnam, signed an Agreement to establish a joint venture for producing gas as an engine fuel in Hanoi.
The signing ceremony was held in the presence of Vladimir Putin, President of the Russian Federation, and Truong Tan Sang, President of Vietnam.
Setting up a joint Russian-Vietnamese company, PVGAZPROM Natural Gas for Vehicles (PVGAZPROM NGV), was a practical step forward from previous agreements reached with Vietnam concerning the use of natural gas as a vehicle fuel. These include converting public transport in Ho Chi Minh City to run on natural gas.
PetroVietnam Gas (PV Gas) will have a 50% share in the capital stock of PVGAZPROM NGV. Gazprom will be represented by Gazprom Gazomotornoye Toplivo and Gazprom International, each with a 25% share in the company.
The project will start in the south of the Republic of Vietnam. Natural gas from fields in the Nam Con Son basin and associated petroleum gas from the fields of the Cuu Long basin will arrive at the Nam Con Son Terminal and Dinh Co. gas processing plants near Vung Tau for treatment and liquefaction. The liquefied natural gas will then be transported to Ho Chi Minh City in tankers. After regasification, the compressed natural gas will be delivered to vehicle filling stations around the country.
"This, Gazprom's third Russian-Vietnamese joint venture, is clear evidence of the active development of our strategic partnership with Vietnam. We are already involved in the joint exploration and extraction of hydrocarbons and are cooperating in LNG. This joint project for gas to be used as a vehicle fuel in Vietnam is the first of its kind for Gazprom in the promising Asia-Pacific market. The project will help to improve Gazprom's economic performance, give it a wider geography in the Asia-Pacific market, and diversify the company's products," said Alexey Miller.
On 4 October 2013 Gazprom and PetroVietnam signed an Agreement on the basic principles of joint venture activities under a project for the use of natural gas as a vehicle fuel in the Republic of Vietnam. The document stipulates promoting cooperation between the companies in converting public transport in Ho Chi Minh City to run on natural gas.
The specialist company Gazprom Gazomotornoye Toplivo was created to implement Gazprom's strategy to develop the market in natural gas as an engine fuel.
The first joint venture between Gazprom and PetroVietnam, Vietgazprom, was set up in 2002 under the Oil and Gas Contract for block No. 112. Today, Vietgazprom is also carrying out the exploration of blocks No. 129, 130, 131 and 132 in offshore Vietnam. Gazprom's interests in these projects are represented by Gazprom International, which specialises in hydrocarbon prospecting, exploration and production outside the Russian Federation.
In October 2013, Gazprom and PetroVietnam began industrial extraction of gas at the Moc Tinh and Hai Thach fields within licensed blocks 05-2 and 05-3 in offshore Vietnam. The extractable reserves are evaluated at 35.9 billion cubic metres of gas and 15.2 million tonnes of gas condensate.
A second joint venture, Gazpromviet, was established in 2009 under a Strategic Partnership Agreement between Gazprom and PetroVietnam. The agreement stipulates continuing joint work on the blocks in offshore Vietnam, as well as examining further opportunities for partnership in the republic's vacant licensed blocks. The agreement also provides for active cooperation between Gazprom and PetroVietnam on oil and gas projects on the territory of Russia, Vietnam and third countries.
In July 2012, Gazprom Marketing and Trading Singapore and the Vietnamese corporation PV Gas signed a Memorandum of Mutual Understanding on cooperation on liquefied natural gas supplies.
PV Gas is a subsidiary of PetroVietnam, Vietnam's state oil and gas corporation.