Japanese trading house Mitsui & Co said on Friday it has reached a final investment decision to develop Vietnam's Block B gas field, with its share of development cost of about $740 million.

The project, 330 km (205 miles) off southwest Vietnam, will comprise a gas field and a pipeline linking it to a gas-fired thermal power plant. Mitsui is making the investment through its unit Mitsui Oil Exploration (MOECO). Its partners are state oil and gas group Vietnam Oil and Gas Group (PVN), PetroVietnam Exploration Production Corp, PetroVietnam Gas Joint Stock Corp and Thailand's PTT Exploration and Production Public Company.

Gas production capacity from the field is estimated at 490 million cubic feet per day, with output slated to start by the end of 2026, Mitsui said in a statement. The project will also include a midstream development for gas transportation.

Two joint ventures of MOECO and the Japan Organization for Metals and Energy Security (JOGMEC) hold a 23% stake in the gas field, while another MOECO subsidiary owns a 15% stake in the planned pipeline, according to the statement.

Mitsui considers natural gas and liquefied natural gas (LNG) as pivotal during the energy transition and expects the project to help a sustainable shift towards a more decarbonised society, it said. (Reporting by Yuka Obayashi; Editing by Kim Coghill)