Petrovietnam ties with Vietnam military firm on ammonia project

State oil and gas group Petrovietnam will establish a venture with a military firm under the defence ministry to produce ammonia that is expected to use natural gas from the disputed South China Sea as feedstock.

The venture, 60% owned by Petrovietnam and 40% by the Hanoi-based General Army of Economic and Technology (Gaet), aims to produce 450,000 tonnes of ammonia a year and also 200,000 tonnes of ammonium nitrite using natural gas, Petrovietnam said in a statement on Thursday.

It did not detail the gas supply but Petrovietnam has been taking natural gas and crude oil from offshore fields in the Cuu Long and Nam Con Son basins of the South China Sea. Ammonium nitrite and ammonia are used in fertiliser production.

“Without help from the Defence Ministry’s forces it is tough for Petrovietnam to conduct exploration and search activities under the circumstance that the East Sea (South China Sea)situation is extremely complicated,” Petrovietnam Chairman Dinh La Thang was quoted as saying at a signing ceremony on Wednesday.

Vietnam and China have had territorial disputes over patches of the South China Sea since late May, including an incident involving Chinese patrol boats cutting a submerge cable used by a Petrovietnam survey vessel mapping in Vietnamese-claimed waters.

China, the Philippines, Malaysia, Brunei, Vietnam and Taiwan all claim territory in the South China Sea. China’s claim is the largest, forming a vast U-shape over most of the sea’s 648,000 square miles (1.7 million square km), including the Spratly and Paracel archipelagos.

China and Southeast Asian countries including Vietnam agreed on Wednesday to a preliminary set of guidelines in the South China Sea dispute, the Chinese side said, a rare sign of cooperation in a row that has plagued relations in the region for years.

Petrovietnam has also been working with the navy to build several projects at the Cam Ranh port, previously a U.S. navy base during the Vietnam War era, Thang said.
The group also worked closely with the Defence Ministry to install wind-power and solar power projects on the Spratlys as well as upgrading oil rigs in the South China Sea, Deputy Defence Minister Le Huu Duc said in the statement.

Petrovietnam did not say when the gas-fired plant run by its venture with military firm Gaet will start operations.

Gas is becoming an increasingly important power generation fuel in Vietnam. Natural gas has helped produce 36 billion kilowatt hours of electricity a year, or 40% of the national output and 100,000 tonnes of gasoline annually or 5% of domestic output, industry officials say.

Vietnam is projected to produce 14 billion cubic metres of gas annually by 2015, up 40% from last year, and will step up buying of liquefied natural gas by late 2013, a state-run newspaper reported earlier this month. – Reuters

Tags: ammonia, PetroVietnam