De-risking a significant and valuable strategic gas resource
Jadestone Energy, an independent upstream company focused on the Asia-Pacific region, has signed a Heads of Agreement ('HoA') with PetroVietnam Gas Joint Stock Corporation ('PV Gas') for the Gas Sales and Purchase Agreement ('GSPA') relating to the Nam Du and U Minh ('NDUM') gas fields development offshore Vietnam.
Overview
- A signed HoA is the first step in the commercialisation of the NDUM fields, located in the Block 46/07 and Block 51 Production Sharing Contracts in shallow water offshore southwest Vietnam.
- The HoA stipulates 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 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 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 NDUM core facilities.
This HoA 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 Nam Du and U Minh fields, the approval of which is key for progressing to a Final Investment Decision of this material project for Jadestone. The Company 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.
The Company has uploaded a short presentation to its website at www.jadestone-energy.com summarising its Vietnam assets and the proposed NDUM development concept.
Paul Blakeley, President and CEO commented:
'Securing a signed Heads of Agreement is a crucial step which helps to restart the commercialisation 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. 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 - all key elements of our strategic aim to be a leading Asia-Pacific upstream company.
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.
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. I would like to thank PV Gas, PetroVietnam and our team in Vietnam for their efforts to bring us to this point, and we will now focus on preparation of the FDP.'
See Presentation: Vietnam Nam Du & U Minh Gas Fields Development January 2024
Source: Jadestone Energy
