Vietnam has proven gas reserves of 6.8 trillion cubic feet (Tcf), according to Oil and Gas Journal. Vietnams natural gas production and consumption have been rising rapidly since the late 1990s, with further increases expected as additional fields come onstream. Natural gas is currently produced entirely for domestic consumption. The Cuu Long basin offshore from the Mekong Delta in southern Vietnam, a source of associated gas from oil production, is the largest Vietnamese natural gas production area.
Only two fields in Vietnam have been developed specifically for their natural gas potential: Tien Hai, with a potential output of 1.76 million cubic feet per day (Mmcf/d); and Lan Tay/Lan Do of Nam Con Son, which began producing over 5 Mmcf/d in 2002. In the Nam Con Son Basin, a $565 million, 230-mile pipeline was completed in June 2002 connecting the Lan Tay and Lan Do fields to the mainland at Vung Tau. The Nam Con Son project consists of five subsea wells linked to a production platform and a pipeline leading to an onshore treatment plant. Gas is piped to three generating plants at the Phu My industrial complex, where electricity is provided primarily to areas surrounding Ho Chi Minh City. In December 2004, the Vietnamese government announced that output from Nam Con Son was expected to reach 88 billion cubic feet (Bcf), exceeding planned production by 90%. The project currently supplies the Phu My 1, Phu My 3, Phu My 2.1 power plants and the extended Phu My 2.1 plant. Phu My 2.2 will begin using output from the field soon thereafter.
In December 2002, a consortium headed by Korea National Oil Corporation (KNOC) signed an agreement to install facilities to pump and supply 130 Mmcf/d of natural gas to Vietnam. The natural gas, located in the Rong Doi and Rong Doi Tay fields on Block 11-2 of the Nam Con Son Basin, is sold to PetroVietnam under a 23-year contract. PetroVietnam resells most this volume to Electricity of Vietnam (EVN). Production at the fields began in mid-2005. In December 2004, KNOC and PetroVietnam signed agreements to further exploit natural gas in both Blocks 11 and 12. Construction of an additional pipeline to bring ashore natural gas from block 11 began in October 2005, and is scheduled for completion in October 2006. The Su Tu Den and Rang Dong oil fields, both of which have considerable Vietnamese reserves of associated natural gas, are located near the 62-mile pipeline from the Bach Ho field. An estimated 60 Mmcf/d of gas from the fields is earmarked for consumption in power plants in southern Vietnam. Both TotalFinaElf and ChevronTexaco (originally Unocal) have found natural gas in exploratory drilling of the Malay basin. Additionally, Talisman Energy has found natural gas at the Cai Nuoc field in block 46. The discovery is close to block PM-3-CAA, which straddles the maritime border with Malaysia, and is expected to contain up to 100 Bcf of recoverable gas reserves. A contract was awarded to McDermott International in March 2006 for construction of a 200-mile pipeline, which will transport natural gas from the PM3-CAA block to Ca Mau province in southern Vietnam. It is scheduled for completion in 2007. In December 2004, PetroVietnam announced that it was reconsidering the $70 million Phu My gas pipeline project from Phu My to Nhon Trach due to increased expenses associated with land costs in compensation areas. The pipeline was initially planned to transport associated gas from the Bach Ho and Rong fields for power generation.