Petrolimex and Japan’s JXTG Nippon Oil & Energy will invest into LNG production to satisfy growing unmet demand in Vietnam |
Vietnam’s current gas production capacity cannot fully satisfy demand, leaving significant opportunities for liquefied natural gas suppliers. Petrolimex is reported to be planning to invest approximately $4 billion on preparing facilities and building power plants in Vietnam.
Vietnam's strongly growing gas demand was the main reason behind Petrolimex's co-operation with JXTG, since the Japanese firm has its own LNG facilities in Japan.
Strong LNG demand could translate into more imports from foreign countries, which would be a blow to government coffers. Hence, international co-operation to increase LNG production capacity is crucial.
The partnership marks a new foray in Vietnam for JXTG, Japan's largest direct seller of crude oil. In 2016, a subsidiary of JXTG Holdings took an 8 per cent stake in Petrolimex for ¥20 billion ($185 million at current rates), Nikkei reported.
According to JXTG’s predictions, Japan's oil demand would decrease by 50 per cent of current levels by 2040. Therefore, co-operation with Vietnam-based firm Petrolimex is a strategic move which can ensure steady profits even as its home market begins to shrink.
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