Thailand-Vietnam energy partnership in the pipeline

The 500-kilometre pipeline is one part of the $1.5 billion gas-to-power complex that includes the development of gas fields in Blocks B and 52, and the addition of the O Mon 2 power plant to the existing O Mon 1a and 1b plants.
The US’ UNOCAL, Japan’s Mitsui Oil Exploration Corp, Thailand’s PTT and PetroVietnam Exploration and Production Company are the four major investors.
PetroVietnam said an agreement was also reached last week on the development of the gas fields.
Negotiations between PetroVietnam and PTT had been underway for several years. Preliminary agreements had also been reached with the US and Japanese partners, a company representative said.
John Parmigiano, president of UNOCAL Vietnam, told Vietnam Investment Review that feasibility studies of the O Mon 2 power plant and gas pipeline would be completed and submitted for approval to the government this year. PetroVietnam would begin the study for the power plant soon, he said.
The partners intend to invest $750 million in field development, $350 million in the pipeline and $400 million in a 750-megawatt gas-fired power plant in the project’s first phase. With total capital at $1.5 billion, the complex will be the country’s largest foreign investment project to date, surpassing the $1.3 billion Nam Con Son gas project.
However, Tay Nam’s gas would be less competitive than Nam Con Son gas due to its higher proportion of carbon dioxide. But this has not affected plans for the complex, Parmigiano said.
UNOCAL is also assisting PetroVietnam to obtain certification from the Vietnamese Government for its gas reserves in Blocks B, 48/95 and 52/97, where UNOCAL holds a 43 per cent working interest and PTT holds 10 per cent. Total reserves in the three gas fields are estimated at between 140 and 225 billion cubic metres. Initial gas delivery, slated for 2008, would be used for the O Mon complex, O Mon 1A, 1B, 2 and Tra Noc power plants.
The Tay Nam gas project is expected to boost economic development and prosperity in the Mekong Delta, while improving Vietnam’s energy balance.
The facility’s construction would match market demand, the partners said.