The door has been opened for foreign investors to buy in stakes in state-run PetroVietnam’s oil and gas projects in Vietnam.
PetroVietnam recently released a list of more than 25 potential projects which foreign investors could jump into.
The group is offering up to 49 per cent stakes in a range of key projects, such as Nam Con Son 2 pipelines, Ca Mau gas processing plan, Dung Quat refinery and Ca Mau fertiliser plant.
The Nam Con Son 2 pipelines transport gas from Hai Thach, Moc Tinh, Thien Ung and Mang Cau fields onshore. Its facility is built on 72.7 hectares of land, including three sections of pipelines.
PetroVietnam’s affiliate PVGas now owns 100 per cent of equity in this project. With investment capital of $1.3 billion, PetroVietnam expected to have Net Present Value (NPV) of $733 million and Internal Rate of Return (IRR) of 18 per cent, with payback period in 6.7 years in this project. The pipeline is expected to be in operation commercially in 2015’s second quarter.
PVGas is also the owner of the Ca Mau gas processing plant, in which foreigners can take up 49 per cent equity ownership. The plant now is under preparation works and expected to be put into operation at the end of 2015. With investment capital of $700 million the plant is expected to have a NPV of $240 million and IRR of 16 per cent, with payback period in 9.4 years.
The door to 49 per cent ownership in Ca Mau fertiliser plant has also been opened. Located in Ca Mau gas-power-fertiliser complex in U Minh district, the factory produces 800,000 tonnes of urea fertiliser per year. It was put into operation in April 2012, with investment capital of $900 million and an IRR of 14 per cent.
PetroVietnam is also offering a chance to buy up to 49 per cent in the existing and expanding Dung Quat refinery and 71 per cent in Long Son refinery.
Dung Quat, Vietnam’s first-ever refinery, commenced commercial operations in June 2010 and now has achieved 100 per cent capacity. The equity ownership is offered to the existing plant and the expansion phase. With the investment capital of $3 billion for existing plant, the refinery is expected to have NPV of $400 million and IRR of 11.69 per cent, with payback period in 15 years. The refinery’s expansion is now in preparation works and expected to commercially operate in the beginning of 2018.
In Long Son refinery, Vietnam’s third refinery, a 71 per cent equity ownership is up for grabs. Located in southern Ba Ria-Vung Tau province’s Long Son Petroleum Industrial Zone, the refinery is expected to commercially operate after 2020. It will have the investment capital expected at $7 billion-$8 billion.