Vietnam’s gas project bags $832m in Japanese loans

The facility will support thermal power plants.

The Japan Bank for International Cooperation (JBIC) has signed financing deals worth $832m for the development of the Block B gas field that will be connected to thermal power facilities in the southwest area of Vietnam.

In a statement, JBIC said it signed the agreements with  MOECO Vietnam Petroleum Co., Ltd., MOECO Southwest Vietnam Petroleum Co., Ltd., and MOECO Southwest Vietnam Pipeline B.V., amounting to approximately $167m, $161m, and $87m, respectively. 

The borrowings are co-financed with private financial institutions, bringing the total co-financing amounts to $335m, $322m, and $175m, respectively.

Block B gas field is located off the southwest coast of Vietnam. Pipelines will be built to transport fuel gas to thermal power plants in the southwest area, which will be done by cooperating with Vietnam Oil and Gas Group, and PTT Exploration and Production Public Company Limited of Thailand.

“The loans will not only support the resources development by a Japanese company, but it will also contribute toward the energy transition in Vietnam,” JBIC said. 

Vietnam has announced its goal to achieve carbon neutrality by 2050 and formulated the Power Development Plan 8 (PDP8) in May 2023. The PDP8 aims to reduce the proportion of coal used for power generation and to use domestic gas and liquified natural gas as power sources in the transition period.