HO CHI MINH CITY OPEN UNIVESITY UNIVERSITÉ LIBRE DE BRUXELLES SOLVAY BRUSSELS SCHOLL OF ECONOMICS & MANAGEMENT HP CHI MBQPM4 LE THI PHUONG HANH BUSINESS DEVELOPMENT STRATEGY OF GAS SOURCE FOR PETROVIETNAM GAS JOINT STOCK CORPORATION FROM 2015 TO 2020 MASTER FINAL PROJECT MASTER IN BUSINESS QUALITY AND PERFORMANCE MANAGEMENT Ho Chi Minh (2014) STATEMENT OF AUTHENTICATION I hereby declare that this thesis entirely done by myself The quotations and datum used in the thesis are cited detail sources and the highest precision of my knowledge and understanding This paper does not necessarily reflect exactly the viewpoints of Solvay Brussels School and Open University of Ho Chi Minh City, Faculty of Economics & Management as well as Petrovietnam Gas Joint Stock Corporation Written guarantee LE THI PHUONG HANH ACKNOWLEDGEMENT I sincerely thank you all Professors of Solvay Brussels School and Open University of Ho Chi Minh City, Faculty of Economics & Management had imparted a lot of valuable knowledge and help me throughout the course, especially for Professor Martin for giving knowledge in the class, providing guidance and suggestions helped me during preparing this thesis and valuable baggage for me in life afterward I highly appreciate to the Board of Planning Division and Market Development Division of PV Gas and all their members were helpful and create favorable supporting and conditions for me to complete this thesis We also have special thanks to family, related classmate and first group of MBQMP4 support and help me a lot during this course DISCLAIMER The ownership and copyright to this thesis is held by the author and Solvay Brussels School and Open University of Ho Chi Minh City, Faculty of Economics & Management The information of this thesis to be keep confidentially and not to be used, transferred, disclosure, reproduction or conversion of this thesis without prior acceptance TABLE OF CONTENTS STATEMENT OF AUTHENTICATION ACKNOWLEDGEMENT DISCLAIMER ABBREVIATIONS LIST OF GRAPH LIST OF TABLE INTRODUCTION CHAPTER - PRESENTATION OF PV GAS 1.1 PV Gas general overview: 1.2 PV Gas establishment and development overview milestones: 1.3 PV Gas projects in operation: 1.4 PV Gas projects under construction & investment: 1.5 PV Gas projects in the North: 1.6 Other PV Gas’ investment: CHAPTER - INTRODUCTION OF NATURAL GAS 2.1 Introduction Of Natural Gas 2.1.1 Overview of Natural Gas 2.1.2 Attractiveness of Natural Gas: 2.1.3 Advantages of Natural Gas 2.2 Method Supply Of Natural Gas 2.2.1 Pipeline 2.2.2 Compressed Natural Gas ("CNG") 2.2.3 Liquefied Natural Gas ("LNG") CHAPTER - ANALYSIS OF PV GAS ENVIRONMENT BUSINESS 10 3.1 Macro Environment 10 3.1.1 Political factors: 10 3.1.2 Economic factors: 11 3.1.3 Social- Cultural factors: 13 3.1.4 Technological factors: 14 3.1.5 Environmental factors: 14 3.1.6 Legal factors: 15 3.2 Micro- environment 20 3.2.1 Demand conditions 20 3.2.2 Factor Conditions 23 3.2.3 Related and Supporting Industries 26 3.2.4 Firm Strategy, Structure and Rivalry 29 CHAPTER –STRATEGIC CHOICES AND IMPLEMENTATION PLAN TO 2020 36 4.1 The opportunities and challenges of PV Gas: 36 4.1.1 Opportunities: 36 4.1.2 Challenges: 37 4.2 Strategic Choices and Implementation plan to 2020 43 4.2.1 Ensuring safe, stable and continuous operation of gas system: 43 4.2.2 Increasing PV Gas’ revenue and profits by enlarging and expanding gas system:43 4.2.3 Increasing investments to ensure PV Gas’ position in international gas industry:48 4.2.4 Re- structure organization to meet PV Gas’ expansion and development: 49 4.2.5 Focusing on research and development: 50 CONCLUSION 52 Summary of PV Gas’ business and development strategy to 2020: 52 Suggestion main development strategies: 52 Conclusion: 52 REFERENCES 54 APPENDIX 56 ABBREVIATIONS Petrovietnam Gas Joint Stock Corporation PV Gas Liquefied Petroleum Gas LPG Power Development Plan PDP Liquefied Natural Gas LNG Compressed Natural Gas CNG Million standard cubic meter mmscm Standard cubic meter scm Million standard cubic meter per day mmscmd Ba Ria – Vung Tau province BRVT Capital Expenditure CAPEX United States Dollar USD Vietnam Dong VND Nam Con Son basin NCS LIST OF GRAPH Graph PV Gas General Overview Graph PV Gas Overview Milestones Graph Gas projects in operation Graph Gas projects under construction & investment Graph Comparison of Emissions Graph Summary of Vietnam GDP growth rate from 2005 to 2013 Graph Violation of right of way Graph Proportional supply gas to Customer up to 2015 Graph Summary of Current Domestic Vietnam Gas Prices Graph 10 Forecast of delivered gas to South Vietnam power plants Graph 11 Forecast of low gas pressure demand of South area Graph 12 Proportional supply gas to Customer up to 2020 Graph 13 Gas shortage forecast (base case) Graph 14 Forecast of required investment capital LIST OF TABLE Table Forecast of Vietnam GDP growth rate Table The assessment of macro environment of gas industry Table Vietnam natural gas resources Table Summary of PV Gas workforce Table Market share CNG and PV Gas S Table SWOT analysis of PV Gas Table Vietnam gas demand by region Table Forecast of financial factors to 2020 Table Forecast income of PV Gas’ labours INTRODUCTION Purpose and objectives of the Thesis: PV Gas is a monopoly in supplying high pressure gas to end-users (such as gas power plants, fertilizer plants) and maintains the major low pressure gas supplier to other gas customers (such as industrial customers, transportation and households) and the biggest wholesaler of LPG in Vietnam market Over 20 years of establishment and development, PV Gas has achieved a certain success and increasingly asserted its position and role in the development of the Vietnamese economy In few years later, PV Gas will face many challenges and difficulties with gas demand increases rapidly while domestic gas resources dwindle and decline as well as appearing many LPG competent rivals To grow and compete with rivals in the market, PV Gas needs to have the appropriate strategy for the situation, chances and goals to maintain its position of unique corporation in supplying dry gas to end-users and the biggest wholesale of LPG In this thesis, I would propose to focus on analysing not only the challenges and difficulties that PV Gas’s facing to but also the implementations, plans and strategies that PV Gas should carry out to meet its targets in gas market Therefore, I have chosen the thesis of "Business strategy development of gas source for PV Gas from 2015 to 2020" to study the business strategies that PV Gas should perform in order to meet its targets Implementation process: To carry out this thesis, there are some theories to be applied such as:  PESTL which is a framework or tool used to analyse and monitor PV Gas’ macroenvironmental (external marketing environment) factors that have an impact on PV Gas’ business, operation and development  Porter's Five Forces of Competitive Position Analysis which based on the concept that there are five forces to be determined PV Gas’ competitive intensity and ... market Therefore, I have chosen the thesis of "Business strategy development of gas source for PV Gas from 2015 to 2020" to study the business strategies that PV Gas should perform in order to meet... natural gas resources Table Summary of PV Gas workforce Table Market share CNG and PV Gas S Table SWOT analysis of PV Gas Table Vietnam gas demand by region Table Forecast of financial factors to 2020. .. Graph 10 Forecast of delivered gas to South Vietnam power plants Graph 11 Forecast of low gas pressure demand of South area Graph 12 Proportional supply gas to Customer up to 2020 Graph 13 Gas shortage