International oil major ExxonMobil is working on a final development plan for the Ca Voi Xanh gas project in central Vietnam, amid moves by the government to refocus on domestic upstream development while dialing back on imported LNG projects.
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The move will also provide Vietnam with a solution to its energy security concerns, as coal-fired power projects are getting difficult to fund and its large offshore discoveries have remained untapped for decades.
"ExxonMobil continues to progress preparatory work [for] Ca Voi Xanh. We completed front-end engineering and design for the project in May 2020, and are working on the final development plan," an ExxonMobil's spokesperson told S&P Global Platts recently in response to inquiries about speculation that the oil major had plans to exit the gas project.
Ca Voi Xanh, one of the largest gas fields discovered in Vietnam, also involves building a pipeline connecting the field to a gas processing plant and associated power and plants.
ExxonMobil said in 2011 that it found hydrocarbons while drilling in the field, and encountered additional hydrocarbons in the area in July 2012. The gas field, located in South China Sea, is located about 80 km (50 miles) off the coast between Vietnam's Quang Nam and Quang Ngai central provinces.
The US energy giant has since partnered with state-owned PetroVietnam to conduct preparatory work for exploiting gas from the field, which is estimated to hold reserves of 150 billion cubic meters.
However, the company has not made any final investment decision for the project yet as it will have to take into consideration several factors such as regulatory approvals, government guarantees, executed gas sales agreements and economic competitiveness, the spokesperson said.
Vietnam has expressed its intention to reduce planned power capacity produced by imported LNG and coal as part of its commitment to implement its 2050- net zero target announced at COP26.
Beside additional power from offshore wind which will need time to develop, the country will have to rely on its domestic gas fields to ensure energy security. However, work at both Ca Voi Xanh and another major gas project, the Block B, has been delayed for several years.
Earlier this month, local media reports indicated that ExxonMobil had plans to withdraw from Ca Voi Xanh and that Exxonmobil was unable to find buyers for its stake in Ca Voi Xanh. The ExxonMobil spokesperson did not comment on the information.