Approval unblocks gas power venture

In light of Decision No.2447/QD-UBND from Can Tho People’s Committee, Electricity of Vietnam (EVN) received the thumbs-up to become the investor of O Mon III, which has around $1.19 billion in total investment value, in which $428 million would be investor’s equity and the remainder raised from different sources.

Perspective of O Mon Power Center (Can Tho). Source: EVN

The move helps boost the project as it has stalled for almost three years due to the evaluation process and some legal aspects. The venture involves the use of official development assistance (ODA) from Japan for implementation, with the relevant dossier soon to be finalised for submission to the prime minister.

The 1,050MW O Mon III is part of O Mon Power Centre based in Can Tho city in Vietnam’s Mekong Delta. The site also accommodates O Mon I, with capacity of 660MW, together with O Mon II and IV at 1,050MW capacity each. With the latest move, EVN is now the investor of O Mons I, III, and IV.

The plants are expected to consume around 4.5-5 billion cubic metres of gas annually, taking gas from Block B, off the southwest coast of Vietnam. Block B has gas reserves of around 107 billion cu.m, ensuring sufficient gas supply to feed these power plants and supersede several near-mature gas fields.

EVN has completed the tender dossier of O Mon IV and envisages issuing bid invitation records after property defining the gas supply progress at Block B.

After O Mon III gets approved, EVN may move to sign a contract on gas supply with PetroVietnam, laying the bedrock to expedite upstream projects on gas exploitation at Block B and developing an associated gas pipeline.

These two upstream projects are awaiting a final investment decision before commencing official implementation.

A source from the Ministry of Industry and Trade (MoIT) said that with O Mons I, III, and IV already having approved investment proposals, financiers of upstream projects can take the final steps of investment issuance and begin implementation.

A source from PetroVietnam, however, opined that the three projects would need to wait until they receive instructions about gas consumption from competent agencies before embracing implementation.

“Having instructions on gas consumption is enough, and we don’t need to necessarily have a commitment on gas consumption from all four power plants. But these instructions need to also cover the O Mon II power plant to ensure integrity,” the source added.

O Mon II is currently expedited by the Marubeni-Vietracimex consortium. The project’s feasibility study was submitted to the MoIT in June for evaluation.

The O Mon III project has an operational duration of 31 years from issuance of the decision on the land lease, which was last year. The project is to kick off construction in the first quarter of 2025 and begin receiving gas from the third quarter of 2027, embracing a trial run and commercial power distribution from the following quarter.