Petronas Delivers First LNG Cargo for Petrovietnam

Petroliam Nasional Bhd. (Petronas) has delivered its first liquefied natural gas (LNG) cargo for Vietnam National Industry-Energy Group (Petrovietnam), renamed earlier this month from Vietnam Oil and Gas Group, as part of a cooperation deal signed 2023.

The cargo was delivered by Petronas LNG Ltd. to Petrovietnam Gas, “paving the way for future collaboration to support Vietnam’s energy security needs and the country’s energy transition masterplan towards a more sustainable future”, Malaysia’s national oil and gas company said in an online statement.

“Building on the foundation established by the Memorandum of Cooperation (MoC) signed on 8 November 2023 between PETRONAS and PVN, this collaboration exemplifies the commencement of a new chapter for both companies. The MoC serves as a framework for fostering long-term collaboration, with LNG supply being one of the key focus areas”.

The LNG came from Petronas’ LNG complex in Sarawak state’s Bintulu town. The supercooled gas was carried by Petronas-chartered LNG vessel Seri Ayu to the Thi Vai LNG Terminal in the Vietnamese province of Ba Ria-Vung Tau.

“As the global LNG market becomes increasingly dynamic, PETRONAS remains committed to supporting PVN in meeting Vietnam’s electricity demand and serving its industrial customers”, said Shamsairi Ibrahim, Petronas vice president for LNG marketing and trading.

The state-owned companies earlier agreed to extend their production sharing contract (PSC) and upstream gas sales agreement (UPSA) for the PM3 Commercial Arrangement Area (CAA) on the Southeast Asian countries’ maritime border for another 20 years.

The Key Principles Agreement “sets the framework for the continuation of the PSC and UGSA until 31 December 2047, ensuring production continuity across seven fields and unlocking further potential [in] PM3 CAA”, Petronas said in a press release April 9.

“The PM3 CAA PSC facilities are also positioned as a strategic hub to support tie-ins from nearby discoveries – optimizing asset utilization and reinforcing energy security in both Malaysia and Vietnam”.

The PM3 CAA covers over 2,000 square kilometers (772.2 square miles) on the maritime border of Malaysia and Vietnam, according to Petronas. The PSC was signed between the partners August 1993.

“With an estimated remaining reserve of up to 60 million barrels of oil equivalent, the abundant hydrocarbon resources in PM3 CAA play a key role in contributing towards sustainable energy security in the region”, said Bacho Pilong, Petronas senior vice president for Malaysia Petroleum Management (MPM). MPM is Malaysia’s upstream regulatory.

The new PSC and UGSA will take effect January 2028, according to a separate press release by Hibiscus Petroleum Bhd., which will remain operator of the PSC. Hibiscus Petroleum will retain a 35 percent stake. Petronas will own 35 percent through Petronas Carigali Sdn. Bhd. Petrovietnam will have 30 percent through Petrovietnam Exploration Production Corp. Ltd.

New terms for gas sales from the PM3 CAA will be established to “ensure continued supply to Malaysia via Kertih and to Vietnam via Ca Mau, supporting national energy demands of both countries”, Petronas said.

“The PM3 CAA is also expected to include plans for the reinjection of carbon dioxide (CO2) produced from petroleum production activities – positioning the area as a potential hub for CO2 sequestration. This approach supports the net-zero aspirations of both countries’ net-zero ambitions by 2050”.

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