Vietnam and fossil gas

From Global Energy Monitor
This article is part of the Global Energy Monitor coverage of fossil gas

Vietnam has a population of 99 million as of 2022.[1] It is one of the fastest growing economies in Asia with a GDP growth rate averaging above 6% per year since 1990[2] and forecasted at 6.5% in 2022 and 6.7% in 2023.[3] Economic growth combined with population growth has resulted in increased energy demand.

The economic growth of Vietnam has also corresponded to an increase in greenhouse gases.[4] Vietnam has an opportunity to transition to green energy, which will largely depend on government policy action. Key energy policies are outlined in the Vietnam Energy Outlook Report, the most recent released in 2019, which include expanding renewables in the power sector to 33% (excluding hydro) by 2050, increasing energy efficiency 8-10% by 2030, and reducing emissions 20-30% by 2030.[2]

Fossil Gas in the Fuel Mix

Vietnam's energy consumption has grown rapidly since the 1990s. This growth has been a result of the electrification of much of the country, leading to an increase in energy demand in the power sector, and the rapid development of heavy industry. [5]

Total gas consumption in Vietnam was 7.1 bcm in 2021, down from 8.8 bcm in 2020 and 9.8 bcm in 2019.[6] Both supply and demand of gas is concentrated in the southern part of the country.[5]

The current gas demand in Vietnam is almost entirely centered in the power sector. Over 85% of the available gas supply is consumed by the power sector, while the remainder is used by the fertilizer (10%) and industrial (5%) sectors . [7]

Total electricity generation in 2021 was 244.8 TWh, representing a 4.3% increase from 2020.[6] Of this, 114.1 TWh was produced through coal, 75.9 TWh through hydropower, 28.3 TWh through renewables, 26.2 TWh was generated using gas, and 0.2 TWh using oil.[6]

Electricity generation is forecasted to reach 338 TWh by 2035.[5] As per the Power Development Plan VIII (February 2022 version), total installed capacity is expected to reach 146 GW in 2030 and 352 GW in 2045.[8] Gas will continue to be a key source of power generation, with its share increasing from 7 GW in 2020 to 13.5 GW in 2025 and 28-33 GW in 2030.[9]

The Ministry of Industry and Trade (MOIT)'s master plan forecasts the power sector to account for 70-80% of total domestic gas consumption by 2035.[10] By 2030, it is projected that nearly 50% of the gas fuel for power generation will come from imported LNG.[11]

In its most recent NDC, submitted in September 2020, Vietnam has committed to an unconditional GHG emissions reduction of 9% by 2030 below BAU levels. It has also committed to a conditional 27% reduction in emissions below BAU levels with international support.[12]

Fossil Gas Production, Imports, and Transportation

Total gas production in Vietnam was 7.1 bcm in 2021, as compared to 8.8 bcm in 2020 and 9.8 bcm in 2019.[6]

Vietnam has 22.8 trillion cubic feet of gas reserves.[6] A number of new gas fields have been identified but have faced numerous delays. Mounting uncertainty surrounds the feasibility of these sources. The Ca Voi Xanh project[13], expected to produce 6 bcm annually, also known as Blue Whale, is an offshore gas site discovered in 2011 that holds an estimated 5.3 trillion cubic feet of gas and is under development by Exxon Mobil. A final investment decision was expected in 2020; however, the project has stalled in recent years and geopolitical uncertainties[14] combined with a failure to agree to commercial terms with the Vietnamese government have cast doubt on its development.[15] The other large gas development site, Block B gas power project, expected to produce 4 bcm annually, has also faced numerous project delays and uncertainties.[16] The expansion of the Su Tu Trang field in Southeast Vietnam is expected to add 2.5 bcm annually by mid-2020s, and 10 other fields are expected to produce 7 bcm collectively by 2035.[5]

In July 2020, Eni discovered hydrocarbons in the Ken Bau-2X exploration well located in Block 114, Song Hong Basin, offshore of Vietnam. Preliminary estimates of the discovery are 7-9 trillion cubic feet.[17] In 2020, Jadestone Energy decided to delay development of its Nam Du and U Minh gas fields. The company has not yet received approvals from the Vietnamese government for its development plans. [18] In November 2020, PetroVietnam produced first gas from the Sao Vang-Dai Nguyet gas field, estimated to have an output of 1.5 bcm.[19]

Due to limited domestic gas resources, and as coal faces stronger opposition, the government of Vietnam has stepped up its push for LNG. The country is expected to become an LNG importer in 2023. The actual import volumes, however, will depend on the outcome of the Eighth Power Development Plan (PDP8), which is currently under development. [20]

According to the 2022 draft of the national infrastructure plan for oil and gas reserves and supply, various LNG infrastructure projects are being developed in the country[21]. PetroVietnam's Thi Vai LNG terminal, with a capacity of 1 MTPA, was 90% complete as of November 2021.[22] Similarly, Cai Mep LNG terminal and Northern Vietnam LNG terminal are also in advanced stages of construction. [21]

There are eight main gas pipelines in Vietnam, all of which are managed by government-owned PetroVietnam.[21]

There is no integrated pipeline network that links the whole country. Therefore, the government has been trying to match supply sources with specific demand areas and end users. The majority of Vietnam's gas supply and its consumption are concentrated in the southern continental part of the country. Significant reserves exist in the Song Hong Basin (offshore north-central region) and also in the Malay-Tho Chu Basin (south-west part of the country).[5]

Government Agencies and other Key Players in Gas Sector

In Vietnam, the Prime Minister's Office has direct oversight of the entire energy industry, while the Ministry of Industry and Trade (MOIT) specifically manages the overall strategy and planning for the energy industry. The MOIT submitted the National Energy Power Development Master Plan 8 (PDP VIII) to Prime Minister Nguyen Xuan Phuc in October 2020. It was expected to be approved by end of the year 2020[23], however, as of September 2022, it was still in draft form.[24]

PetroVietnam (PVN), the national oil and gas company, is responsible for the majority of development in the gas sector. PVN is involved in exploration, production, trading, transportation, imports, and some businesses in power generation. [5]

Articles and resources


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