Asia-focused oil and gas company Jadestone Energy has signed a heads of agreement with PetroVietnam Gas Joint Stock Corporation (PV Gas) for the gas sales and purchase agreement (GSPA) relating to the Nam Du and U Minh gas fields offshore Vietnam.
A signed a heads of agreement is the first step in the commercialization of the Nam Du and U Minh (ND/UM) fields, located in the Block 46/07 and Block 51 Production Sharing Contracts in shallow water offshore southwest Vietnam.
The terms stipulate a daily contract quantity of 80 mmscfd 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.
Initial wellhead gas price in the heads of agreement is comparable to the price of recent Vietnam pipeline gas imports, and subject to annual escalation, according to Jadestone Energy.
The ND/UM fields, in which Jadestone currently has 100% working interests, contain gross aggregate 2C resources of 171.3 bscf of gas and 1.6 mmbbls of liquids, as evaluated by ERCE as of December 2017.
Jadestone estimates significant upside potential surrounding the existing discoveries, with any future resource additions likely to represent straightforward tie-backs to the ND/UM core facilities.
The heads of agreement forms the basis for detailed negotiations over a fully-termed GSPA.
It is also the precursor which allows the submission of an updated Field Development Plan (FDP) for the NDUM fields, the approval of which is key for progressing to a Final Investment Decision (FID) on the project.
The company said it is preparing to submit an updated FDP in the near future, which will specify the development concept for the ND/UM fields, associated capital and operating cost estimates, and a schedule to first gas.
“Securing a signed heads of agreement is a crucial step which helps to restart the commercialization of our Vietnam discoveries, and regain momentum for the development of this very important asset within our portfolio.
“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 Government to see this resource developed,” said Paul Blakeley, President and CEO of Jadestone Energy.