Suspending gas supply from PM3 Ca Mau for regular maintenance and repair work and gas supply efforts of PV GAS

To ensure the safety of gas production system, the investor of PM3 - CAA & 46 Cai Nuoc (PM3 Ca Mau) project, Talisman (a Canadian contractor) announced the plan to suspend gas supply totally for 14 days, from July 06^th to July 19^th, 2014, to perform equipment maintenance and repair work.

This work is performed by the foreign contractor on its offshore equipment cluster that is outside the management scope of PV GAS. This maintenance and repair work is a part of regular annual maintenance plan of Talisman, which was notified to EVN and gas end-users by PV GAS in the end of October, 2013, and then frequently updated in the coordination meetings and updated reports in accordance with provisions of the gas sales and purchase agreement. Therefore, Electricity of Vietnam (EVN), power plants and consumers have been aware of this plan to prepare alternative energy sources.

After suspension period for maintenance and repair work, the supply of gas by Talisman will be resumed normally. Gas supply capacity of PVN/PV GAS to consumption will be restored to the previous capacity of about 6.2 million m³/day. However, according to the notices of consumers from July 20^th, 2014 to August 10^th, 2014, gas consumption demand will be only 4.7 million m³/day as Ca Mau 1 Power Plant is suspending the acceptance of gas for regular maintenance and repair.

The regular maintenance and repair work performed by the gas producer, Talisman, as well as other gas supply systems) is mandatory to ensure the safety of gas supply systems. To minimize the impact of this maintenance and repair work on the gas supply for power production, Vietnam National Oil and Gas Group together with PV GAS worked with Talisman, PetroVietnam Power Corporation and Electricity to Vietnam negotiate to reduce gas supply suspension period as much as possible, agreeing that the suspension of gas supply from PM3 Ca Mau in this year shall start from the beginning of calendar July, which is also the start of rainy season. At the same time, PV GAS also tried to provide the maximum supply of gas from Cuu Long and Nam Con Son to power plants in the South East region to supplement the insufficient gas supply in the South West region. Currently, gas capacity in Cuu Long and Nam Con Son to be supplied to power plants in the South East region is 4-5 million m³/day higher than that in the similar period of preceding year. So, the impact of suspending gas supply in PM3-Ca Mau on power production has been minimized.

In 2012, 2013 and 6 beginning months of 2014, PV GAS always operates the gas supply pipelines and equipment under its management safely and stably with a reliability of 100% and hasn’t allowed any problem occurring on the equipment under PV GAS’ management that may result in possible suspension of or decrease in gas supply to consumers.

Recently, Talisman has met with some unexpected problems that impact on gas supply to consumers, but those problems occur on the equipment under the management of foreign contractor outside PV GAS’ control. During the recent occurrence of problems that Talisman has faced with, PV GAS has provided support to producer, requested in writing and called to urge Talisman to quickly resume the operation of equipment. In fact, the recovery of recent problems has been completed earlier than expected by Talisman. PV GAS also strengthened the mobilization of unaffected gas sources and cooperated closely with consumers to ensure timely communication and flexible coordination of gas supply sources to minimize the impact of offshore problems on the consumers.

In spite of the difficulties as a result of problems with upstream gas producers, in 6 beginning months of 2014, total gas supply capacity for both South East and South West regions still reached 4.5 billion m³, which is 12.8% higher than the contractual obligation to supply gas to power plants.

In the coming time, PV GAS will continue maintaining safe and stable operation of the pipelines and equipment under its control, as well as request the foreign contractor to furtherer strengthen the maintenance and repair of equipment to minimize the risks and endeavor to provide the maximum gas supply for power production.