$1.3 Billion Nam Con Son Project Delivers First Gas

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26 November

Vietnam is moving a step closer to energy independence this week as operations commence from the Nam Con Son gas project - a $1.3 billion project that will significantly increase the country's energy self- sufficiency and provide a reliable source of energy for its rapidly-growing economy.

Up to 3 billion cubic meters (100 billion cubic feet) of gas will flow ashore each year during the project's first phase, providing power and a new energy source to feed Vietnam's growing industrial base. Partners BP, PetroVietnam, ONGC Videsh, and ConocoPhillips estimate the gas could be used to generate about 40% of Vietnam's existing electricity supply, a huge increase in the country's energy potential.

The partners gathered today with invited guests to celebrate the accomplishment at a gala event in Ho Chi Minh City's Reunification Palace.

"The Nam Con Son Gas project is the most important gas project and will be a firm foundation on which the natural gas industry will develop," said PetroVietnam General Director Nguyen Xuan Nham. "The project is considered by the Government of Vietnam to be a key driver for commercial and industrial development in Vietnam's southern provinces."

The massive investment project includes development of an offshore gas field, construction of 399km pipeline to carry the gas ashore; onshore processing facilities, and the 716-megawatt Phu My 3 power plant.

Gas from the Nam Con Son gas project will be marketed directly to Petro Vietnam, which will serve as marketer and will deliver the gas to end users in the Phu My industrial zone.
"The innovative and performance-driven mindset of our people were key to BP, as project operator, delivering this important new energy supply on time and on budget for the people of Vietnam," said BP Director General Steve Walker. "We look forward to working with Petro Vietnam to deliver even greater volumes of natural gas and condensate from future projects in the Nam Con Son Basin."

The gas project is tapping reserves discovered in the Lan Tay and Lan Do gas fields in Block 06.1. The two fields contain reserves of 58 billion cubic meters and are expected to supply gas for the next 20 years. Other natural gas fields have been discovered in the basin and will provide more resources to feed Vietnam's energy growth.

"Given Vietnam's impressive economic growth and its growing importance in the area of international trade, the Nam Con Son gas supply will provide a reliable supply of energy to fuel that growth," said ONGC Videsh Regional Senior Vice President Anupam Mathur. "We look forward to a continued partnership with Vietnam as we develop these energy resources."

The successful completion of the project has set a standard for other big investment projects and sends a strong message to the international community that a multi-billion dollar project can be successful in Vietnam.

"The Nam Con Son Project should send a strong message to foreign investors that Vietnam is a good investment destination, especially with the availability of abundant, environmentally-clean, and cost-competitive natural gas," said ConocoPhillips Vietnam President Georg Storaker. "We see Vietnam as a key growth area in Southeast Asia and look forward to growing our business interests here."
Vietnam has embarked on a massive program to increase its electricity generation capabilities, and the new gas source provides a needed fuel supply for those plants. One of the new power plants is the Phu My 3 facility, currently under construction. The project, with its combined cycle power generation technology, will enable Vietnam to generate electricity more quickly, cheaply and cleanly than ever before. Operations are slated to begin in late 2003.

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