Quyết định 60/QD-TTg

DECISION

APPROVING THE PLAN FOR DEVELOPMENT OF THE GAS INDUSTRY OF VIETNAM BY 2025 WITH VISION TO 2035 

THE PRIME MINISTER

Pursuant to the Law on Government Organization dated June 19, 2015;

Pursuant to the Prime Minister’s Decision No. 1748/QD-TTg dated October 14, 2015 on approving the strategy for developing the oil and gas industry of Vietnam by 2025 with vision to 2035;

After considering the request of the Minister of Industry and Trade,

HEREBY DECIDES

Article 1. to approve the plan for development of the gas industry of Vietnam by 2025 with vision to 2035 that represents the following contents:

1. Development viewpoints

Put forward the general plan for development of the gas industry of Vietnam with a view to implementing objectives of the gas industry sector in the strategy for developing the oil and gas industry of Vietnam by 2025 with vision to 2035 which has been approved by the Prime Minister.

Connect development of the gas industry of Vietnam with the strategy and plan for national electricity development in order to make effective use of clean fuel sources and make significant contribution to promoting national energy security and reducing greenhouse gas emissions.

Develop the gas industry in a consistent and efficient manner through capitalizing on domestic resources and enhancing international cooperation.

Develop the gas industry according to the principle that domestic resources should be consumed in an economical, effective and reasonable manner; make arrangement for import of liquefied natural gases (LNG) in parallel with gathering of new domestic gas sources so as to make up for a current decrease in volume of gas sources and uphold the capacity to supply gases to households for consumption purposes. 

Provide completely-built facilities for gathering, transport and processing of gases in conformity with the principle that capacity of the existing facilities should be maximally used, and facilities for storage, import and distribution of LNG should be gradually constructed and improved.

Promote investment in deep processing of natural gases and diversification of products to increase value of gases used and effectiveness of gas products in the economy.

Establish regulatory policies to gradually transform the model of management of Vietnam's gas industry, and regulations on trade in gases directed toward the free gas market and integrated into the regional and global gas market. Expand the market for gas consumption through the state-regulated market mechanism, encourage foreign contractors and investors to participate in the gas value chain constituted by upstream, midstream and downstream segments in order to maintain long-term energy security in the country and implement sustainable development policies.

2. Development objectives

Invest in development of the gas industry sector with all stages which are organized in a complete and uniform manner, including extraction – gathering – transport – processing – storage – distribution of gases and import and/or export of gas products across the country; ensure that gas production produced from blocks/gas fields of PVN and oil and gas contractors operating in Vietnam is fully gathered.    Strive to achieve the gas production volume across the country in the period 2015 - 2035 as follows:

- 2016 – 2020 period: The expected volume of gas production is 10 – 11 billion m³/year.

- 2021 – 2025 period: The expected volume of gas production is 13 – 19 billion m³/year.

- 2026 – 2035 period: The expected volume of gas production is 17 – 21 billion m³/year.

In terms of import and distribution of LNG, carry out market research and discovery activities, and speed up construction of storage facilities and ports to get ready for receipt and import of LNG to reach targets set out in each of the following periods:

- 2021 – 2025 period: The volume of gas to be received and imported is 1 – 4 billion m³/year.

- 2026 – 2035 period: The volume of gas to be received and imported is 6 – 10 billion m³/year.

In terms of development of gas consuming markets,

- Keep on developing the electricity market to make it become the main market for gas consumption (including imported LNG) which accounts for a proportion of approximately 70 - 80% compared with total gas production, and ensure that gas supplies are adequate to meet the demand for input fuels for the electricity generation process.  

- Develop the gas-based petrochemical industry, promote investment in deep processing of natural gases in order to increase the added value of gas products, create raw materials, fuels and substances for domestic industrial manufacturing and exporting purposes, and reduce proportion of the trade deficit.   

- Continue to maintain and expand the system of distribution of gases to households to serve their industrial consumption, transportation and urban living purposes with the intention of protecting environment and raising value attained after using gases. Develop a synchronous system of distribution of low – pressure gases and compressed natural gases (CNG) to create a premise for development of the system of distribution of gases for traffic and transportation purposes.

- Strive to develop a gas market that has the following sizes:

+ 2016 – 2020 period: The volume of gas to be consumed in a gas market is 11 – 15 billion m³/year.

+ 2021 – 2025 period: The volume of gas to be consumed in a gas market is 13 – 27 billion m³/year.

+ 2026 – 2035 period: The volume of gas to be consumed in a gas market is 23 – 31 billion m³/year.

In terms of facilities for storage, trading and distribution of LPG,

- Expand capacity of the existing LPG storage units in conjunction with construction of new LPG storage units in order to meet domestic demands expected to reach about 3.5 – 4.0 million tons/year in 2025 and approximately 4.5 – 5.0 million tons/year in 2035, and satisfy requirements concerning the minimum reserve volume of gas that can be supplied for a period of more than 15 days.

- Strive to hold 70% of the share of domestic LPG market.

3. Development orientation

a) Northern region

Search for solutions, push forward with gathering of gases from small gas fields spread over the region in order to increase capacity for supplying gases to households for their industrial consumption purposes throughout the region, step-by-step study and construct facilities for LNG import to maintain capacity for supplying gases used by households for their industrial consumption purposes in the event of a decrease in the gas source in this region, and invest in development of LNG-fueled power plants according to the national power plan already approved by the Prime Minister.  

b) Central region

- Enthusiastically stimulate and improve facilities for gathering, transportation and processing of gases derived from the Ca Voi Xanh gas field which are supplied to gas-fueled power plants located within the Central region according to the national electricity plan already approved by the Prime Minister.  Invest in development of the petrochemical industry using gases derived from the Ca Voi Xanh gas field after ensuring that the gas demands of power plants have been fully satisfied. Invest in development of the system of distribution of low-pressure gases, manufacture CNG/LNG on a small scale which is supplied to households for their industrial consumption purposes.

- Gradually study and build the infrastructure system for import and distribution of LNG in the event that there is any decrease in the gas source in the region and new household consumers appear.

c) Southeast region

- Improve gas gathering and transportation facilities at potential gas fields in order to maintain an adequate source of gases for existing households' uses, push forward with gas field prospection, exploration and development activities in order to ensure sufficient gas supplies in the region.

- Embark on construction of storage facilities and ports for import of LNG to make up for a decrease in domestic gas supplies and meet the demands of power plants according to the national electricity plan already approved by the Prime Minister.  

d) Southwest region

- Improve the system of facilities for gathering and transportation of gases mined from Block B & 48/95, 52/97 and other small gas fields to the Southwest (including Khanh My, Dam Doi, Nam Du, U Minh, etc.) which are supplied to newly-established Electricity Centers according to the national electricity plan already approved by the Prime Minister; generate supplementary gas supplies to the existing household consumers in the Southwest region.   

- Build facilities for import of LNG to maintain capacity for supplying gases to household consumers, invest in construction of newly-built LNG-fuelled power plants.   

4. The portfolio of main investment projects in the gas industry

a) Main gas infrastructure development projects

- Northern region:

+ 2016 – 2025 period:

+ 2026 – 2035 period:

- Central region:

+ 2016 – 2025 period:

+ 2026 – 2035 period:

- Southeast region:

+ 2016 – 2025 period:

+ 2026 – 2035 period:

- Southwest region:

b) LNG import projects

- 2016 – 2025 period:

- 2026 – 2035 period:

c) LPG storage facility system

- 2016 – 2020 period:

- 2021 – 2025 period:

- 2026 – 2035 period:

5. Investment demand

- Total investment demand of the gas industry for the 2016 – 2025 period is nearly USD 10.6 billion (equivalent to about 240 thousand of billion of Vietnamese dongs), specifically comprised of the followings: 

Unit: million USD

- Total investment demand of the gas industry for the 2026 – 2035 period is nearly USD 8.5 billion (equivalent to about 190 thousand of billion of Vietnamese dongs), specifically comprised of the followings: 

Unit: million USD

6. Solutions

a) Management structure (including regulatory policies and models)

- Continue to study, revise and update legislative documents related to management of Vietnam's gas industry in commensurate with the current conditions of development of the domestic gas industry and international conventions. 

- Carry out complete transformation of the model of management of Vietnam's gas industry which is oriented towards the free gas market for the post-2020 period, gradually move towards the objective in which the Government only administers operations of the gas industry by means of legislative document system, and market participants are granted autonomy to negotiate commercial agreements, gas sale, purchase, transportation and business contracts.

- Establish rational gas market price policies with assurance that interests of the Government, enterprises and consumers are all duly respected.

b) Investment

- Make public notice of the plan and portfolio of investment projects, encourage all domestic and foreign economic sectors’ involvement in investment in gas industry activities; establish investment incentive policies which are much favorable for investments in each type of project, geographical areas, especially for gas fields which are operated on a small scale, located at distant deep waters and contain high CO₂ content at such basins as Red River, Phu Khanh, Ma Lay - Tho Chu, Tu Chinh - Vung May and Truong Sa - Hoang Sa.

- Raise the Government’s roles in investment in infrastructure facilities for gathering, transportation and treatment of gases which are deemed as the core strategy to encourage involvement of organizations or individuals in investment in development of the gas industry.

- Promote international cooperation of which cooperation with traditional partners or regions having favorable political systems, national gas and oil companies in the region or across the globe should prefer in order to attract investments in development of upstream projects.

- Establish and apply proper tax incentives with the aim of attracting foreign investments; issue policies to give preferential treatment to domestic and foreign investors in order for them to design and develop projects for cooperation in manufacturing LNG overseas, transmission and distribution of LNG in Vietnam, and to domestic investors in order for them to participate in LNG, CNG import and distribution, and clean fuel distribution projects, etc. for environmental protection purposes.   

c) Finance and financing arrangement

- Intensify attraction of FDI funds and funds derived from other domestic economic sectors by diversifying forms of investment and strengthening investment promotion activities in order to attract interest from foreign investors. 

- Diversify lending forms, including bank credit, export credit, Government’s concessional credit, domestic and international bond issuance and finance lease.

- Build good and mutually beneficial relationship with traditional commercial banks; expand cooperation with prestigious banks in the region and all over the globe; implement the Government's security for loans used for financing significant gas and oil projects.

d) Market

- Effectively carry out information and forecast activities serving as the orientational basis for formulation of plans and implementation of business operations in a due manner.  

- Create a chain of supply – manufacturing – consumption stages in order to build a firm correlation between production input and output.

- Find integration opportunities to provide favorable conditions for enterprises to have proper solutions to increasing their competitiveness and effectiveness in their operations; encourage enterprises to extend cooperation, joint venture and affiliation with foreign partners to expand overseas markets.

dd) Science and technology

- Improve the database system concerning Vietnam's gas industry, regularly update and assess nationwide gas potential and reserves. Stimulate application of scientific and technological advances to exploration and extraction operations in order to ensure efficiency increase, save natural resources and elevate gas recovery factor, make best use of other resources and duly protect national natural resources. Conduct researches in and propose approaches to gathering, treatment and use of gas sources having high CO₂ content, marginal and offshore gas fields distant from the shore. Set up the database concerning the gas industry of Vietnam and regional and worldwide countries.

- Establish unified policies on science and technology, align scientific research and training activities with practical conditions of business operations, update scientific and technological applications used in gas and oil operations, inspire organizations or individuals to take part in investment in piloting of new scientific and technological applications used for developing potential gas projects in Vietnam. 

- Put more efforts on researching and developing software for modeling, simulation, optimization, risk analysis and management, investment effectiveness management, market analysis and forecast, etc., officially apply information technology applications and automation processes in all of the gas industry stages.

- Carry out researches in and apply technologies or solutions for deep processing, increase consumption value of gases and gas products in an effective manner, assess the possibility of extracting, gathering and importing coal bead methane (CBM), hydrate and shale gases, etc.     

e) Human resource development

- Enhance training to raise qualification for current officers and employees working in the gas industry, and to provide additional personnel to work in stages in which there is a lack of personnel.

- Draw up the human resource strategy and plan; frequently review and assess human resource quality according to requirements concerning job titles. 

g) Safety, environment and sustainable development

- Strictly observe legislative regulations on fire safety, prevention and control, safe working conditions and good industrial sanitation practices.

- Draw up, update, finalize and maintain, in a regular manner, the plan for emergency prevention, control and rescue, and response to gas well blowouts and other accidents or natural disasters.   

- Implement necessary measures to maintain occupational health, safety and protect working environment for employees.

- Carry out dissemination of information and universalization of knowledge about, and training in, environmental safety and protection.

- Combine measures to protect environment in the gas industry with those in other operations within the same operational area.

- Enhance international cooperation to acquire new knowledge, experience and technologies in occupational safety, health and environment protection.

h) National defence and security

- Strengthen cooperation between stakeholders of gas industry projects and the Ministry of National Defense, the Ministry of Public Security and the Ministry of Foreign Affairs in order to actively and duly perform the task of protection of territorial waters and national sovereignty, assurance of security for upstream, midstream and downstream activities in the gas industry.

- Increase offshore gas production activities; form joint ventures and affiliation with trustworthy and competent partners across the globe in order to contribute to protecting sovereignty over national islands and territorial waters.

Article 2. Implementation

1. The Ministry of Industry and Trade

- Take charge of implementation of the general plan to develop Vietnam’s gas industry by 2025 with vision to 2035, and in the near future, focus on effective development of investment projects by 2025 as planned.

- Take charge of and collaborate with relevant ministries and sectoral authorities in reviewing legislative documents on gas and oil activities to request the Government to make any necessary revision and facilitate development of the gas industry of Vietnam.

- Take charge of and collaborate with relevant ministries and sectoral departments in establishing and requesting the Government to issue policies on gas prices which must be reasonable and ensure mutual benefits between the Government and enterprises, and between enterprises, to create a premise for more robust development of the gas industry of Vietnam.

2. Other ministries and sectoral authorities

Actualize tasks and measures relating to their assigned powers and functions.

3. People’s Committees of centrally-affiliated cities and/or provinces

People’s Committees of centrally-affiliated cities and/or provinces shall liaise with Ministries or regulatory authorities and enterprises to formulate the socio-economic development plan of each local jurisdiction in conjunction with development of infrastructure facilities of the gas industry in order to provide intersectoral support; save sites having the advantage of deepwater seaports and proper land reserves for the task of developing the gas industry.    

4. Gas manufacturing and trading enterprises

Proactively formulate the plan and implement projects included in the plan as appropriate to each enterprise’s business operations.  

Article 3. This Decision shall enter into force from the signature date.

Article 4. Ministers, Heads of Ministry-level agencies, Heads of Government bodies, Presidents of People’s Committees of centrally-affiliated cities and/or provinces, and relevant entities, shall be responsible for enforcing this Decision./.