The importance of the Vietnamese gas industry

The Bach Ho oil field was put into production by Vietsovpetro on 26 June 1986. Until 1995, associated gas was separated from crude oil on offshore platforms and had to be flared due to lack of facilities for its collection and transport to shore for use.

As oil production increased, the volume of associated gas flared increased, leading to significant waste of resources and environmental pollution. This situation urgently required the development of infrastructure to collect and transport associated gas to the coast for use in the national economy.

With the firm determination of the Politburo, Vietnam Oil and Gas Group (Petrovietnam) and Petrovietnam Gas Corporation (PV GAS), efforts were made to gradually build and put into operation gas projects. This step-by-step approach realized the goal of effectively exploiting, collecting and utilizing gas resources to meet energy demand and support the country’s economic development.

From May 1995, the first gas flow came ashore, marking the beginning of the formation and development of the gas industry in Vietnam. This milestone also marked the beginning of a new chapter for the Vietnamese oil and gas industry. Through unremitting efforts, continuous learning, creative work and effective utilization of global experience through cooperation with foreign companies, Petrovietnam and PV GAS have gradually built a strong Vietnamese gas industry.

By applying and transferring scientific and technological advances, they have established the gas industry as an indispensable source of energy for the nation, used in various sectors such as electricity, industry, transportation and residential use.

Today, the country has a complete gas infrastructure covering all stages: collection – export/import – transportation – processing – storage – and distribution of gas and derived products. PV GAS currently operates five gas systems with a total pipeline length of more than 1,500 km, three gas processing plants with a total capacity of more than 15 billion cubic meters per year, and LPG storage facilities with a capacity of almost 150,000 tons throughout the country. The Corporation also has an extensive distribution network and stations throughout the country.

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The Corporation’s infrastructure has been continuously expanded and upgraded. In 2023, PV GAS put the 1 MMTPA Thi Vai LNG terminal into operation. This facility added approximately 1.4 billion cubic meters of gas supply per year, contributing significantly to national energy security and economic development.

With its leading role in Vietnam’s gas industry, PV GAS currently transports and supplies 8-10 billion cubic meters of gas annually. This ensures the necessary input to produce nearly 10% of the country’s electricity, meet 70% of the national demand for fertilizers and supply various industries. In Vietnam, PV GAS holds 100% of the dry gas market share, 70% of the wholesale LPG market share and around 11% of the retail LPG market share.

The company’s annual revenue ranges from US$3.5 to US$4 billion, with pre-tax profits of US$500 to US$700 million. It contributes about US$300 million annually to the state budget and its total assets amount to about US$3.6 billion. As a flagship entity of Petrovietnam, PV GAS is recognized as an exemplary enterprise in numerous prestigious domestic and international rankings.

Pioneers on a new journey

Looking ahead, Vietnam’s gas industry in general and PV GAS in particular are expected to be impacted by the trend of energy transition and the rise of renewable energy sources. Moreover, the implementation of gas power projects still faces many unresolved issues due to the involvement of multiple stakeholders and factors throughout the gas-power chain from upstream to downstream. LNG projects face numerous challenges related to supply sources, market and specific policy mechanisms. Consequently, the industry is gradually entering a new phase of development.

From May 1995, the first gas flow came ashore, marking the beginning of the formation and development of the gas industry in Vietnam.

In response to the demands of this new phase and guided by the development orientation of “Building and developing PV GAS into a leading unit in the gas industry, playing a key role in boosting Vietnam’s gas market and contributing to national energy security”, the Corporation has undertaken extensive preparations to maintain and advance its growth trajectory.

PV GAS has focused, and will continue to focus, on solutions to improve the efficiency of its existing gas infrastructure. In addition, the Corporation emphasizes and intensifies efforts to invest in the development of its infrastructure and promotes market development through diversification of products and consumer segments.

The PV GAS market is geared towards expansion and development based on strengthening its traditional market/customer base. The traditional market serves as a solid foundation and driving force for building and developing new markets/products/customers, including investment in new trend-aware infrastructure with high added value, ensuring sustainable and long-term efficiency for PV GAS. Accordingly, the Corporation’s future flagship products will include LNG, processed and downstream gas products, as well as green energy products such as hydrogen and ammonia.

It can be said that our country’s gas industry has made steady and convincing progress in recent years, with a promising future that guarantees stable and long-term development. This growth accompanies the mission of building, developing and protecting the nation, continuing the journey towards broader horizons – the “Green Energy Journey”.