Minh-Ngoc Nguyen
Research Expert covering Vietnam
Oil and gas industry in Vietnam - statistics & facts
As the world shifts towards greener energy, Vietnam finds itself at a crucial juncture, balancing its reliance on fossil fuels with the growing promise of cleaner alternatives. The oil and gas industry has fueled Vietnam's economic growth for decades, contributing significantly to the state budget and positioning the country as a leading oil and gas producer in the Asia-Pacific region. However, Vietnam is also exploring liquefied natural gas (LNG) as a more sustainable energy source to meet its future needs.
To support this shift, PVGAS is expanding infrastructure, including developing new LNG terminals, storage facilities, and distribution networks. These efforts underscore Vietnam's ambition to become a regional LNG hub, aligning with the global movement toward cleaner energy while maintaining its competitive position in the global energy market.
Crude oil production in Vietnam
Crude oil is the basis of essential petroleum products like motor gasoline, diesel, and liquefied petroleum gas (LPG). In Vietnam, about two-thirds of this oil produced is refined to meet domestic crude oil demand, with the majority processed at the Dung Quat refinery. The rest is exported, with Thailand and Australia being among Vietnam’s top trading partners in 2023. Vietnamese crude, especially from the Bach Ho Basin, is highly sought after due to its low sulfur content (below 0.5 percent), which gives it an edge over higher-sulfur oils from the Middle East. Despite having significant oil reserves, Vietnam faces a unique challenge—its refineries, particularly Nghi Son and Dung Quat, are not optimized for every type of crude oil. For example, the Nghi Son refinery is specifically designed for a Kuwaiti oil blend with a 2.52 percent sulfur content. This means Vietnam still imports specialized crude for refining and exports some of its high-quality crude for commercial gain.LNG and a greener energy future for Vietnam
Natural gas, though less dominant than crude oil, is another key player in Vietnam's energy mix. In 2023, the PetroVietnam Gas Joint Stock Corporation (PVGAS), part of the larger Vietnam Oil and Gas Group (PetroVietnam or PVN), became the first company in Vietnam to import liquefied natural gas (LNG). In July 2023, PVGAS received its inaugural LNG shipment—70,000 metric tons—at the Thi Vai LNG terminal to support domestic energy needs. LNG, created by cooling natural gas to -160°C, represents a cleaner alternative to traditional fossil fuels. It emits 40 percent less carbon dioxide than coal and 30 percent less than oil, making it a key component in Vietnam’s strategy to transition towards sustainable energy. The push towards LNG is not just about meeting current demand—it is also about long-term energy security and environmental responsibility. Vietnam, like many countries, is feeling the pressure to reduce its carbon footprint, and the adoption of LNG is a significant step toward achieving this goal.To support this shift, PVGAS is expanding infrastructure, including developing new LNG terminals, storage facilities, and distribution networks. These efforts underscore Vietnam's ambition to become a regional LNG hub, aligning with the global movement toward cleaner energy while maintaining its competitive position in the global energy market.
