$1.2B coal-fired power plants to be built in Vietnam

PetroVietnam has awarded two contracts worth a combined $1.2 billion to two subsidiaries to build a 1,200-megawatt coal-fired power plant. These will eventually boost its thermal coal imports from Indonesia and Australia, the government said.

It has also licensed Malaysia’s Jaks Resources to invest $2.25 billion to build a coal-fired power plant in northern Vietnam, a state newspaper reported on Friday.

Bob Kamandanu, a commissioner at Indonesia’s Berau Coal, said high demand from Vietnam’s growing economy was a potential boon for Indonesia.

“They are seeking more coal, and Indonesia is one of their destinations,” he said.

Kamandanu, who is also the chairman of the Indonesian Coal Mining Association, would not confirm whether Berau Coal was in talks with any Vietnamese companies.

The contracts for the Quang Trach 1 plant were signed with PetroVietnam Construction Corp. and PetroVietnam Investment Consultancy and Engineering Corp. Construction will start on July 19, the government said in a statement.

PVE said the contract was valued at $17.6 million, the largest in Vietnam so far for a designing deal. The plant would use coal imported from Indonesia and Australia, the statement said, adding that its use of pulverized coal-fired technology would be environmentally friendly.

Vietnam, a net coal exporter, is expected to import 6.5 million tons of the fuel annually by 2015, from around half a million tons a year in recent years, as domestic supply declines, a minister was quoted on Thursday as saying.

The government said PVE would take the designing role and PVC would buy, install and test-run equipment, including two generators, at the plant in Quang Binh province’s Quang Trach district, 410 kilometers south of Hanoi.

The first generator is slated to start operation in June 2015 and the second in December 2015, with a combined annual output expected at around 8.4 billion kilowatt hours, the government’s statement said.