Sector Brief
01 July 2026
Domestic gas production volume recovery
Su Tu Trang Phase 2B gas field achieved first gas on 29 June 2026 from well ST-9P, one day ahead of schedule, with two further wells (ST-10P, ST-4PST) due in 2H26. The milestone matters most for PVS with a disclosed VND10,000bn-plus EPCIC backlog via PTSC M&C, already in our model, and less for PVD, whose rig work is already embedded in our forecasts; for GAS it is a longer-dated, energy-security positive that flows in at plateau. We maintain Buy on PVS (TP VND55,000), PVD (TP VND46,500) and GAS (TP VND120,000), all trading below their historical average 1Y rolling forward P/E.
Event: Su Tu Trang Phase 2B field comes online in phases
On 29 June 2026, the Su Tu Trang (White Lion) Phase 2B development at Block 15-1 achieved first gas from well ST-9P, with initial flow of approximately 30.7mn cubic feet per day of gas and 6,096 barrels per day of condensate, one day ahead of schedule. The development plan was approved by the Ministry of Industry and Trade on 20 August 2025 and is operated by PVEP’s Cuu Long Branch under a Gas Sales Purchase Agreement (GSPA) with committed delivery obligations. Phase 2B refers to a follow-on development stage of the long-producing Su Tu Trang field (onstream since 2013), not a new discovery. This stage involves additional wells, a new Central Gas Facility platform, and brownfield upgrades to unlock further gas and condensate reserves in Block 15-1 offshore Vietnam. The investors in the Block 15-1 are PVEP, Perenco, KNOC, SK and Geopetrol.
ST-9P, ST-10P and ST-4PST are individual production wells within the same development, not separate fields. “ST” denotes Su Tu Trang, the number is the sequential well, and “P” marks a producing well; the “ST” suffix on ST-4PST indicates a sidetrack, which is a secondary wellbore drilled off an existing path to access additional reservoir sections at lower cost than a new well. Two further wells are scheduled in 2H26: ST-10P (September) and ST-4PST (November).
PVD I jack up rig is drilling the Su Tu cluster. Redeployed from Malaysia, the rig has been on contract to PVEP Cuu Long since March 2026 and is drilling the Su Tu cluster (Block 15-1) campaign, which covers ST-9P, ST-10P and ST-4PST through 31 December 2026.
Sector context: Su Tu Trang within Vietnam’s offshore project pipeline
Su Tu Trang Phase 2B is one of six fields identified as near first oil/gas, expected together to add ~8 bcm/year of new gas capacity plus 30-40k b/d of oil for Vietnam. The table below places it against those peers by scale and timing; Hai Thach-Moc Tinh is an infield development at an already-producing field but is included in the total.
These fields are expected to offset the decline in domestic natural gas production volume, while the remaining shortfall is met by imported LNG. The chart below quantifies that balance.
Reconciling “first gas in 2027”: HSC’s sector tracker shows Su Tu Trang Phase 2B reaching ~1.29 bcm/year at plateau, with production “starting” in 2027 against a 2025 Final Investment Decision. This is not a contradiction: ST-9P’s first gas is early production tied back through existing Su Tu Trang infrastructure, ahead of the new central gas facility (CGF) platform that will host full plateau output. PVEP Cuu Long and PTSC M&C only signed the EPCIC contract for the CGF platform and a second living-quarters module on 22 April 2026, with delivery targeted for 4Q27-1Q28. The field therefore ramps in two stages: Incremental volumes from individual wells through 2026 via existing facilities, then a step-up to full plateau output once the new CGF platform is commissioned in 4Q27-1Q28.
The gas volume from existing fields fell from around 10 bcm/year in 2015 to a trough of around 6 bcm/year by 2026 and continues declining through 2030E to roughly 4 bcm/year even after the new fields come online, because the new fields only partially offset the legacy decline rather than reversing it. Block B is the largest new-field contributor (building toward roughly 5 bcm/year by 2030E), with Su Tu Trang 2B, Nam Du-U Minh and Thien Nga-Hai Au each adding smaller increments. From around 2027E, LNG imports become the largest single source of incremental supply, growing from a negligible base to roughly half of total supply by 2030E, taking the total to around 25 bcm/year, up from the 2025-26 trough.
For GAS, Su Tu Trang Phase 2B’s ~1.29 bcm/year is a genuine but modest contributor to slowing the domestic decline, consistent with the energy-security theme. But on Figure 3, the larger and faster-growing piece of the supply story from 2027 onward is LNG imports, not new domestic fields. GAS’s medium-term volume growth is therefore increasingly an LNG-import story layered on top of a domestic base that keeps shrinking naturally, rather than a pure domestic-replacement story. This pipeline underpins PVS’s offshore EPCIC backlog and PVD’s rig-demand outlook through FY27-28.
Expected impact by name
PVS: PTSC M&C (a 100%-owned PVS subsidiary) was awarded the Su Tu Trang Phase 2B EPCI contract by Cuu Long JOC, per PTSC’s announcement on 10 July 2025: scope covers one central processing platform (CPP, topside over 6,500 tonnes, foundation approximately 5,000 tonnes), with a disclosed value of over VND10,000bn (approximately USD390mn). This is a direct backlog addition alongside PVS’s existing Block B and Lac Da Vang awards, and it is already captured in our PVS forecasts — not incremental upside. We model the contract at an approximately 2% gross margin, excluding the product guarantee reversion released several years after delivery.
PVD: PVD I jack up rig is on contract to PVEP Cuu Long for the Su Tu cluster through 31 December 2026, and the work already embedded in our FY26F revenue and net profit forecasts at our standard market day rate. ST-9P’s on-schedule first gas, and the rig’s continued programme into ST-10P and ST-4PST, are evidence the campaign is executing to plan, not a new backlog that would lift our estimates.
GAS is not a near-term beneficiary of this milestone; it is several years out and not embedded as a distinct catalyst in our GAS estimates. Once Su Tu Trang Phase 2B reaches plateau in 4Q27-1Q28, its ~1.29 bcm/year would flow into GAS’s transport and processing system as decline-offset volume, consistent with HSC’s sector framing. As Figure 3 shows, however, new domestic fields only partially offset the legacy decline; LNG imports are the larger and faster-growing component of supply growth from 2027 onward, which means GAS’s medium-term volume growth skews increasingly toward LNG rather than pure domestic field replacement.
Ratings and valuation
We maintain Buy ratings on all three names. PVS is trading 0.5 SD below its historical average P/E, PVD 1.0 SD below, and GAS 0.9 SD below, as of 30 June 2026.
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