Pipeline in Vietnam an energy milestone
VUNG TAU - It took 10 years from gas discovery to
transmission and 7,000 workers, but this week Vietnam saw the
fruits of a $1.3 billion energy project, the biggest foreign
investment in the country.
On budget, on schedule and with no major glitches, the BP-led
project shows a "foreign-invested project can be successfully
done in Vietnam," Nam Con Son pipeline managing director Do
Ba Canh said in a tour of the 168-acre terminal.
The gas from Nam Con Son basin, 224 miles off the southern
coast -- estimated at 95.35 million cubic feet a day -- will be
piped to a power and urea complex.
"It's a landmark development for Vietnam," said Norman
Valentine, energy analyst at Wood Mackenzie in London.
Project operator BP, which owns 35 percent of main gas Block
6.1, about a third of the pipeline and all of another block under
development, reckons Block 6.1 will help meet about 40 percent
of the current national demand.
The timing couldn't be better.
Electricity demand is seen at twice the pace of the economy's 7
percent economic expansion.
Yet, about a third of Vietnam's 80 million population lack access
to modern energy such as kerosene, electricity and gas.
The World Bank says that two-thirds of Vietnam's required
investment in energy will have to come from official development
assistance, export credits and foreign direct investment.
For investors such as ONGC Videsh Ltd., in from the start with
the gas field discovery, the project has whetted its appetite.
The biggest stakeholder in the upstream part of the project at 45
percent, the unit of India's state-run Oil and Natural Gas Corp
may go beyond its $200 million investment to date.
"We would like to look at the pipeline, too," Atul Chandra,
managing director of the company said.
The 240-mile pipeline's stakeholders are BP with 32.67 percent,
ConocoPhillips at 16.33 percent and Petrovietnam with 51
percent.
Petrovietnam sees the gas field supply, along with several other
projects, raising Vietnam's oil and gas production in 2004 to 23
million tons, from 18.5 million this year and 16.75 million tons
tapped in 2001.
Crude oil is Vietnam's biggest export, bringing in $2.86 billion
from January to November. But Vietnam must import oil products
at considerable cost as it has no refining capacity.
Reuters - November 26, 2002.
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