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Friday March 10, 4:06 PMVietnam to have 2nd gas pipeline early 2007HANOI, March 10 (Reuters) - Petrovietnam has awarded McDermott International Inc a $60 million contract to install a gas pipeline, Vietnam's second, for completion in early 2007, an official from the company said on Friday."Work on the pipeline installation is under way and we want to make this happen quickly to meet fuel demand from power plants," the official, who is closely involved in the project, told Reuters. He said the 298-kilometre (185-mile) pipeline would have an initial output of around 135 million cubic feet per day (mmcfd). Petrovietnam is the sole investor for the $325 million pipeline project and has hired the Vietnam-Russia oil venture Vietsovpetro as the main engineering, procurement and construction contractor. At present, the country's only gas pipeline, the Nam Con Son, is operated by Britain's BP Plc with all output of around 13 million cubic metres per day (459 mmcfd) used to feed power plants in the southern region. The new pipeline will deliver natural gas from the offshore PM3-CAA block, which also produces Bunga Kekwa crude oil in the Malay Basin straddling Vietnamese and Malaysian waters, to power plants in Vietnam's southern-most province of Ca Mau. Malaysian state oil firm Petronas [PETR.UL] has been taking around 1.25 billion cubic metre per year of gas to generate electricity in Malaysia. Officials from the Petrovietnam have said the gas from the PM3-CAA pipeline project would be used exclusively for Petrovietnam-operated power and fertiliser plants. NEW GAS-FIRED PLANTS Hanoi plans to more than double gas-fired power generation capacity to 7,000 megawatts by 2010, from 3,000 megatwatts now, with a string of gas-fired plants built in the country's oil and gas hubs of Ba Ria-Vung Tau and Ca Mau provinces. The Southeast Asian country has a vast natural gas reserve located off its southern coast, estimated at around 25 trillion cubic feet of recoverable gas, based on Petrovietnam's data. An increase in the number of private businesses and a rise in disposable incomes in the communist country have resulted in electricity demand growth averaging 15 percent per year, driving the government to plan 60 additional plants by 2010. Foreign investment in the power industry has picked up significantly in the past year after Hanoi announced plans to gradually liberalise the sector and raise retail prices by nearly 9 percent this year to around 5.4 U.S. cents per kilowatt hour. Last November Electricite de France [EDF.UL] launched a $400 million gas-fired plant in Ba Ria-Vung Tau, while U.S. utility AES Corp plans to build a 1,000-megawatt coal-fired plant in the country's north at a cost of $1 billion. Last week Petrovietnam said it had begun construction of a 750-megawatt gas-fired power plant in Ca Mau, which is expected to be operational by 2008 and fuelled by gas from the PM3-CAA pipeline. Hydro-power plants account for 40 percent of Vietnam's around 11,000 megawatts of electricity generation capacity, while 30 percent is generated by gas-fired plants and the remainder comes from coal and fuel oil-fired plants. |
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