Singapore-headquartered independent Jadestone Energy has signed a gas sales deal for its Nam Du and U Minh (NDUM) fields development offshore Vietnam, the first key step towards commercialising the shallow-water asset.
The field development concept envisages a leased gas processing floating production, storage and offloading vessel located at the Nam Du field with two minimal facilities unmanned wellhead platforms — one on each field — with design capacity of 100 million cubic feet per day of gas, and two production wells per platform. U Minh’s condensate would be exported by shuttle tankers while the project’s gas export pipeline would be tied into the existing Ca Mau pipeline, with the pre-installed pipeline having tie-in points for upside prospects.
Jadestone on Friday confirmed it had signed a Heads of Agreement (HOA) with state-owned PetroVietnam Gas Joint Stock Corporation (PV Gas) for the gas sales and purchase agreement (GSPA) for the NDUM project, which is located on the Block 46/07 and Block 51 production sharing contracts offshore southwest Vietnam.
“While there remains significant work ahead to deliver a GSPA and a detailed project plan and development schedule to first gas, this is a clear signal of intent from the [Vietnam] government to see this resource developed. The Nam Du and U Minh gas fields would deliver significant medium-term production growth for Jadestone, further diversifying our asset base and increasing our gas volumes while decreasing our GHG emissions intensity,” commented Jadestone’s chief executive Paul Blakely.
“The likely timing of FID at Nam Du/U Minh would result in capital expenditure occurring no earlier than mid-2025, thereby supporting an organic funding solution through Jadestone’s cash flow generation, available debt and the added potential of bringing in partners during the development phase.”
The HoA stipulates a daily contract quantity of 80 MMcfd of gas under a take-or-pay arrangement over a targeted minimum plateau period of 55 months, with an earliest possible first gas date in late 2026. Jadestone noted the initial wellhead gas price in the HoA is comparable to the price of recent Vietnam pipeline gas imports, and subject to annual escalation. The fields have low CO2 gas with no mercury or hydrogen sulphide.
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The NDUM fields, in which Jadestone currently has 100% working interests, contain gross aggregate 2C resources of 171.3 billion cubic feet of gas and 1.6 million barrels of liquids, as evaluated by ERCE as of December 2017. The operator estimates significant upside potential surrounding the existing discoveries, with any future resource additions likely to represent straightforward tie-backs to the NDUM core facilities. Geological and geophysical evaluation of potential upside prospects in the NDUM area is ongoing.
The operator added that the HOA is also the precursor that allows the submission of an updated Field Development Plan (FDP) for the Nam Du and U Minh fields, the approval of which is key for progressing to the final investment decision. Jadestone is preparing to submit an updated FDP in the near future, which will specify the development concept for the NDUM fields, associated capital and operating cost estimates, and a schedule to first gas.
“Nam Du/U Minh production will also help reduce Vietnam’s reliance on expensive gas imports, which have a higher GHG emissions intensity than domestic gas. It would also contribute to the country’s energy transition and stated goal of Net Zero greenhouse gas emissions by 2050, as well as creating local jobs and economic benefits,” added Blakeley.