Exxon-Vietnam gas deal to test Tillerson’s diplomacy
US energy giant Exxon Mobil and state-owned PetroVietnam agreed this month to develop Vietnam’s largest natural gas-fired power generation project, a US$10 billion joint venture known as ‘Blue Whale’ (Ca Voi Xanh). The deal, signed while outgoing US Secretary of State John Kerry was on his last official visit to Vietnam, threatens to create new ripples in the contested South China Sea under the new Donald Trump administration.
The project is scheduled to come online in 2023 and will draw on a natural gas field situated 88 kilometers from Vietnam’s central Quang Nam province in the South China Sea. The field is estimated to hold some 150 billion cubic meters of natural gas, three times the amount of Vietnam’s current largest gas project, a joint venture with Russia’s Gazprom in the southern Con Son Basin.
Exxon Mobil will construct an 88-kilometer sea-to-shore pipeline, while PetroVietnam’s Exploration Production Corporation (PVEC) subsidiary will build gas treatment and four power plants with a total capacity of 3 gigawatts, according to reports. A planned expansion phase will generate enough gas for another 5,750 megawatts of power and petrochemical production, the reports said. PetroVietnam estimates the project will produce US$20 billion for state coffers over an undefined timeline.
The deal comes against the backdrop of Trump’s decision to scrap the Trans-Pacific Partnership agreement, a US-initiated trade pact of 12 Pacific Rim countries of which Vietnam stood the most to gain. The tariff-slashing deal, if it had been implemented, projected to boost Vietnam’s gross domestic product (GDP) by 11%, or US$36 billion, and exports by 28% over the decade spanning 2015-2025. Vietnam is a signatory to the China-led Regional Cooperative Economic Partnership, which does not require the same type of economic reforms that TPP would have required….cont’d
"..... Two faces; one for love and another for the DMV". -- Between The Two, by poet Kenji Liu
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