PetroVietnam ties with Vietnam military firm on ammonia project

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State oil and gas group PetroVietnam will establish a venture with a military firm under the defense ministry to produce ammonia that is expected to use natural gas from the East Sea as feedstock.

The venture, 60 percent owned by PetroVietnam and 40 percent by the Hanoi-based General Army of Economic and Technology (Gaet), aims to produce 450,000 tons of ammonia a year and also 200,000 tons 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 East Sea. Ammonium nitrite and ammonia are used in fertilizer production.

PetroVietnam has also been working with the navy to build several projects at the Cam Ranh port, previously a US navy base during the Vietnam War era, Thang said.

The group also worked closely with the Defense Ministry to install wind-power and solar power projects on the Spratlys as well as upgrading oil rigs in the South China Sea, Deputy Defense 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 percent of the national output and 100,000 tons of gasoline annually or 5 percent of domestic output, industry officials say.

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

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