Vietnam's guarantee for vast gas project

Vietnam's guarantee for vast gas project

HANOI (AFP): Vietnam's government has agreed to provide guarantees to foreign oil firms for the country's biggest natural gas project, worth US$1 billion, official media said Sunday.

Documents extending the guarantee were signed Friday by officials of the planning and investment ministry and representatives of British Petroleum, Statoil from Norway and The Oil and Natural Gas Corporation from India, communist party organ, Nhan Dan said.

The guarantee, aimed at reassuring foreign investors, concerns the transport of natural gas from the Nam Con Son offshore basin 400 kilometers (360 miles) southeast of southern Vietnam's Vung Tau city.

Gas from the Nam Con Son basin, discovered in 1993, with reserves estimated at 58 billion cubic metres, is to be transported overland to the Phy My hydroelectric station in the Ba Ria-Vung Tau province, the paper said.

Initial accords on the project were signed in April last year between the three foreign firms and the state-owned PetroVietnam but bureaucratic delays held up progress.

Foreign experts say lengthy negotiations on the price of gas added to the delay in finalizing an agreement.

Vietnam produces more than 10 million tons of crude oil and a billion cubic metres of gas from its joint venture project with Russia, VietsovPetro. The country has no refinery and ships out almost all of its production.