Singapore’s Jadestone Energy has signed a heads of agreement (HOA) with Petrovietnam, relating to gas sales from the Nam Du and U Minh gas fields in block 46/07 and block 51, respectively, offshore Southwest Vietnam.
Jadestone holds a 70% working interest in the Nam Du and U Minh gas fields and is the operator.
The HOA covers all discovered resources from the Nam Du and U Minh fields, and establishes a mutually agreeable framework for gas sales, priced at the wellhead, and delivered to a tie-in point at a nearby existing pipeline, Jadestone said on Monday.
The agreed daily contract quantity (DCQ) is established as 80 mmcf/d, targeting a minimum plateau period of 55 months. In addition to the DCQ, the HOA specifies certain take-or-pay provisions, in addition to a pricing formula in principle, all of which will be finalized in the ultimate gas sales and purchase agreement (GSPA).
The parties intend to negotiate an initial wellhead price, in accordance with the agreed pricing formula, following the availability of updated cost data for the development, expected post summer 2019. The spirit of the HOA captures a negotiated price outcome that will be competitive, while providing Jadestone with an appropriate full cycle investment return. The parties are targeting GSPA signing and field development sanction before the end of 2019.
Paul Blakeley , President and CEO commented: “Signing a Heads of Agreement with Petrovietnam marks a significant milestone in our commercial negotiations, as we look to develop the Nam Du and U Minh gas fields. With key terms now broadly agreed, we can now press forward with the project activities that should lead to a development decision being taken later this year. This will realise a significant portion of the long-term value of the company’s Southwest Vietnam Assets, delivering growth towards our target of 30,000boepd by 2023, as well as significant cash flow and value, with first gas anticipated in late 2021.”
The Nam Du and U Minh fields contain 2C resources of 171.3 bscf of gas (119.9 bscf net to Jadestone, based on a 70% working interest) and 1.6 mm bbls of liquids (1.1 mm bbls net to Jadestone), evaluated by ERCE as of December 2017.
As specified in the outline development plan, approved in May 2018 , the company intends to commercialize the fields as a stand-alone development, utilizing existing infrastructure which provides feedstock for a 1.5GW onshore power complex, and an adjacent 800,000 tonne/year fertilizer plant.
Spotted a typo? Have something more to add to the story? Maybe a nice photo? Contact our editorial team via email .
Offshore Energy Today, established in 2010, is read by over 10,000 industry professionals daily. We had nearly 9 million page views in 2018, with 2.4 million new users. This makes us one of the world’s most attractive online platforms in the space of offshore oil and gas and allows our partners to get maximum exposure for their online campaigns.