Jadestone Energy plc, an independent upstream company focussing on the Asia-Pacific region, announced that it has signed a Heads of Agreement (HOA) with PetroVietnam Gas Joint Stock Corporation for the Gas Sales and Purchase Agreement (GSPA) relating to an offshore development in southwest Vietnam.

The HOA, signed on January 26, is the first step in the commercialisation of the Nam Du and U Minh (NDUM) fields, located in Block 46/07 and Block 51 Production Sharing Contracts in shallow water. The agreement forms the basis for detailed negotiations over a fully termed GSPA and also serves as a precursor to allow the submission of an updated Field Development Plan (FDP) for the NDUM fields, the approval of which is key for progressing to a final decision from Jadestone.

The company is preparing to submit an updated FDP in the near future, which will specify the development concept for the NDUM fields, along with associated capital and operating cost estimates, and a schedule to ‘first gas’.

The HOA stipulates a daily contract quantity of 80 million standard cubic feet per day under a take-or-pay arrangement over a targeted minimum plateau period of 55 months, with the earliest possible ‘first gas’ date in late 2026. 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 NDUM fields, in which Jadestone currently has a 100 per cent working interest, contain, at best estimate, gross aggregate resources of 171.3 billion standard cubic feet of gas and 1.6 million barrels of liquids, as evaluated by energy consultancy ERCE in 2017. Jadestone estimates significant upside potential surrounding the existing discoveries, with any future resource additions likely to represent straightforward tie-backs to the NDUM core facilities.

Paul Blakeley, president and CEO of Jadestone said, “Securing a signed HOA is a crucial step which helps restart the commercialisation of our discoveries in Vietnam, and regain momentum for the development of this significant asset within our portfolio. While there remains significant work ahead to deliver a GSPA and a detailed project plan, this is a clear signal of intent from the government to see this resource developed. The NDUM gas fields could deliver significant medium-term production growth for Jadestone, further diversifying our asset base and increasing our gas volumes while decreasing our emissions’ intensity – all key elements of our strategy.”

“The likely timing of a final decision on NDUM would result in capital expenditure occurring no earlier than mid-2025. The project could also help reduce Vietnam’s reliance on expensive gas imports and would also contribute to the country’s energy transition and stated goal of net-zero by 2050, as well as creating local jobs and economic benefits,” Blakeley added.

Vietnam Investment Review