PetroVietnam to invest $1.3 billion in second Nam Con Son gas line

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Feb. 25 -- PetroVietnam plans to invest $1.3 billion in a proposed second natural gas pipeline from the Nam Con Son basin off southern Vietnam.

The new line will carry gas from Blocks 05.1 and 0.52 in the Hai Thach and Moc Tinh projects in the Nam Con Son basin to feed electric power plants in Phu My district in the southern province of Ba Ria-Vung Tau.

The 400-km line will be built in parallel with the current pipeline to transport as much as 6 billion cu m (bcm)/year of gas from fields in the Nam Con Son basin. Stakeholders in the old line include PetroVietnam 51%, BP PLC 32.27%, and ConocoPhillips 16.33%.

The first Nam Con Son line, built by BP at a cost of $1.3 billion, has a capacity of 7.3 bcm/year but normally averages 5.5 bcm/year. PetroVietnam affiliate PetroVietnam Gas Corp. said it carried 5.516 bcm via the Nam Con Son line in 2009.

After the new line comes on stream, the country’s onshore gas supply will increase by 30-40% to 10-11 bcm/year, said Phung Dinh Thuc, PetroVietnam general director.

According to analyst BMI, construction of a second Nam Con Son pipeline could provide gas to fuel further increases in power generation capacity in southern Vietnam.

Vietnam's power generation sector consumed 4.6 bcm of gas in 2008, and BMI forecasts this consumption to increase to 12.3 bcm by 2013 as gas-fired power reaches 45.2% of the country's total electricity generation.

“In addition, we see total Vietnamese gas consumption of 7.9 bcm in 2008 rising to 15 bcm in 2009 and 21 bcm by 2015,” BMI said.

The analyst said the new pipeline could “also be used to supply rising residential and industrial demand in the area, which contains a number of fertilizer and steel plants.”

Contact Eric Watkins at hippalus@yahoo.com.

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