Viet Nam will have to import up to 17 billion tonnes of gas for domestic use annually after 2025 despite its sizeable reserves of natural gas, a senior official has said.
Addressing a meeting held on Thursday to release a World Bank report titled Viet Nam Gas Sector Development Framework, Deputy Minister Industry and Trade Hoang Quoc Vuong said Viet Nam has natural gas reserves of 700 billion tonnes.
Potentially, it has an additional 700 billion tonnes yet to be recognised as reserves, he added. Vuong said so far the country has exploited some 90 billion tonnes to fuel power generation, fertiliser production and other industrial sectors.
The World Bank report says that the natural gas sector is set to triple in size over the next 15 years and presents a vision of the infrastructure and institutions needed to overcome the challenges and realise these objectives.
The gas sector is facing multiple challenges, including greater demand for gas and a potential gas shortage, which may become worse if a few key decisions for change are not made soon, the report says.
“Development of the natural gas sector is a key component of Viet Nam’s overall economic policy and is prominent within the National Strategy for Energy Development,” said Alain Barbu, Acting World Bank Country Director for Viet Nam.
“Viet Nam wants to move towards more competitive markets with more liberalised pricing, and this should be done gradually, so that a stable pricing framework, with linkages to competitive fuel markets, can support the build-out of gas production and infrastructure.”
The report recommends that from now until 2025, Viet Nam should apply various measures to address the uncertainty in the pricing methodology, the weaknesses in converting resources into reserves and to attract more investment in the sector.
It stresses that Viet Nam needs to create a competitive gas pricing methodology, and eventually, a wholesale competitive gas market.
It also suggests that the Ministry of Industry and Trade sets up an advisory unit on gas policy development, adjusting PetroVietnam’s role and establishing a modern regulatory structure.
According to the report, Viet Nam’s gas sector has tremendous potential that can be realised by 2025 with concerted and coordinated efforts by public agencies and their private partners.
Gas now meets over 15 per cent of the country’s primary energy demand and 88 per cent of the gas is currently consumed by the power sector. Gas-fired generation accounts for 40 per cent of total electricity supply.
