Petrovietnam to Import Australian Coal to Meet Energy Needs

By Vu Trong Khanh

HANOI–Vietnam plans to import coal from Australia to help it meet rapidly growing energy needs that are being driven by economic growth averaging 7% over the past decade.

Vietnam, once a major coal exporter, has seen its foreign sales nosedive as supplies are being kept home for domestic use. Exploitation of abundant reserves of offshore natural gas is going slowly, in part due to commercial wrangling, and Vietnam’s first nuclear power plants won’t start generation until at least 2020.

PV Power Coal, a unit of state oil and energy firm Petrovietnam, has signed a framework pact with Australia’s Ensham Resources Pty. Ltd., to import around 3 million metric tons of thermal coal annually to feed two large coal-fired power plants under construction in southern Vietnam, Petrovietnam said Tuesday. The start date wasn’t announced.

The two 1,200 megawatt plants each will burn 3.2 million tons of coal a year and are scheduled to start power generation in 2015 and 2016.

Vietnam’s coal exports peaked in 2009 at just over 25 million tons and have fallen sharply since then.

Vinacomin, the country’s sole coal producer, said in March that it will cut annual coal exports to between 4 million and 5 million metric tons by 2015 from 14.5 million tons last year to save the fuel for local power plants. It expects to mine 43 million tons of coal this year.

The Asian Development Bank says Vietnam’s electricity demand is expected to rise by 14% a year during 2011-2015 and by 11% a year during 2016-2020.

Vietnam already imports small amounts of coal from Indonesia. Vinacomin says it is cheaper to do this than transport it from the northern province of Quang Ninh, the country’s key coal production area.

Vietnam plans to use a lot more natural gas to make electricity, but slow progress at major projects is causing delays.

Petrovietnam Chief Executive Do Van Hau said in April that his company and Chevron Corp. had so far been unable to meet a 2012 timetable for a commercial agreement on a $4.3 billion project to pipe gas from fields off southern Vietnam to planned power plants.

Exxon Mobil Corp. had made Vietnam’s biggest gas find to date off the country’s central coast, but commercial production there would not start for five-to-seven years, Mr. Hau said.

Vietnam hopes to raise its total installed power-generating capacity to 75 gigawatts by 2020, from 21 gigawatts in 2010, with coal-fired plants accounting for 48%, hydropower 23% and gas-fired plants 16.5% of this.

It has borrowed $8 billion from Russia to build a civil nuclear complex, with construction due to start next year.

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