Technology and resources needed to meet rising energy demand

 The demand for oil and gas in Vietnam is on the rise. According to state-owned oil and gas group PetroVietnam, the country’s oil production will reach 420,000 barrels per day at its peak in 2014, reflecting a compound annual growth rate of 3.7 percent from 2009-2014.

At present, the Dung Quat oil refinery in the central province of Quang Ngai is the only refinery in operation in Vietnam. However two others are under construction, namely Nghi Son in the central province of Thanh Hoa and Vung Ro in the central province of Phu Yen, in order to meet growing domestic demand for fuel. Furthermore, the Vietnamese government is also planning to double the production capacity of the Dung Quat refinery, while considering granting a permit to Thailand’s PTT Group to build a $20 billion oil refinery in the central province of Binh Dinh.

With regard to gas, national consumption increased 13.68 per cent annually from 2005-2009. The state-run PetroVietnam’s figures for 2013 show that natural gas production reached almost 9.2 billion cubic metres, the majority of which was used to fuel gas-fired power plants in the south, with the remainder used for fertiliser production and other industrial uses.

In 2011, the government issued a decision that set out major development targets for the gas industry, including increasing the output for natural gas production to 14 million cubic metres per year by 2015 and 15-19 billion cubic metres per year during 2016-2025.

Next year, the Vietnamese government aims to develop a gas infrastructure network for the southern market, and inter-regional gas transmission pipelines to supply gas from the southern and central regions to the north.

The domestic demand for gas will continue to rise, with more investments expected into gas-fired power generation in Vietnam. For instance, US oil and gas giant ExxonMobil is planning a large-scale project worth $20 billion on Vietnam’s central coast. The company will co-operate with PetroVietnam to find a suitable location for the construction of a thermal power and gas treatment complex in the Dung Quat Economic Zone, where PetroVietnam runs the Dung Quat oil refinery. The project will include a 4,000-5,000 megawatt thermal power generation facility and a gas treatment plant.

GE’s strong commitments

While the government of Vietnam is planning to further develop its oil and gas industry, GE, with its advanced technologies and equipment, has the opportunity to get involved in the process.

“GE Oil & Gas has a long term commitment to Vietnam. We invest not only in infrastructure capabilities but also in the development of local engineering talent through skills training and knowledge transfer,” said Visal Leng, general manager of GE’s Oil & Gas Division in Asia.

Late last year, GE opened its first GE Vietnam Engineering Centre (GE VEC) in Vietnam, marking a new milestone in the group’s penetration into the local oil and gas market.

Located in District 7 in Ho Chi Minh City, the centre provides product design and applications services that focus on the oil and gas sector in Vietnam and the surrounding region. It is expected to employ up to 200 engineers in the coming years and expand into application engineering and production design for other GE businesses in the region.

“The foundation of the VEC highlights GE’s commitment to bringing our broad range of infrastructure capabilities to Vietnam in a company-to-country partnership.  We recognise and support the development of young engineering talent as a national priority for Vietnam to accelerate economic growth,” Leng said.

As the first business unit to provide engineering work for the GE VEC, GE Oil & Gas believes that this will lead to the creation of a pool of high quality Vietnamese engineers with broad oil and gas experience in the region.

“We expect to recruit up to 200 highly qualified local engineers in the coming years.  They will be given opportunities to learn, develop and build fulfilling careers with GE,” Leng explained.

In the field of knowledge sharing, the engineering centre is not the first instance of GE delivering up-to-date technology to local engineers. GE Oil & Gas has also organised technology workshops in Vietnam on drilling and production systems, turbo-machinery, and measurement and control.

GE Oil & Gas has a strong presence in Hanoi and Ho Chi Minh City with a focus on hi-tech machinery, drilling and production equipment, and support services. In addition to its long-term partnership with PetroVietnam to provide technical assistance, GE Oil & Gas has delivered advanced technological equipment and services to several high-profile projects in Vietnam such as Bien Dong POC High Pressure, High Temperature Surface Wellheads and Xmas Trees, BP pipelines, the Dung Quat oil refinery, the Phu My gas-fired power and fertiliser processing complex, the Ca Mau fertiliser plant and the Vietsovpetro joint venture.

GE’s presence in the sector was manifested in 2010 with the signing of a memorandum of understanding (MoU) with PetroVietnam, the third largest oil producer in Southeast Asia. The MoU outlines the principles for long-term co-operation between the two companies concerning the supply of advanced oil and gas equipment, services and spare parts to optimise the complete life cycle value of key oil and gas projects.

In particular, the MoU provides a framework for future collaborative action based on standardised contractual terms and conditions, and manufacturing slot reservations. Furthermore, it addresses the potential for co-operation on new oil and gas technologies, technical support for projects and advanced skills development and training, including access to GE’s world-class management practices ‘Lean’ and ‘Six Sigma’, designed to improve the productivity and effectiveness of the workforce.

To a certain extent, the newly established GE VEC gives an indication of GE’s long-standing commitment to playing an active role in Vietnam’s oil and gas industry, especially since the country is boosting the industry’s development in a bid to ensure energy security.