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| TA Name | Preparing the Support for the Public-Private Development of the O Mon Gas Pipeline Project | |||
| Country | Viet Nam,Soc Rep of | |||
| TA Number | 4923 | |||
| Project Number | 41008- 01 | |||
| Fund Source/Amount[Approved] |
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| Thematic Classification |
Private Sector Development
Economic growth |
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| Description | The O Mon Gas pipeline will transport natural gas from Block B and 52/95 located in the Malay-Thochu basin southwest of Viet Nam to fuel the 2,760 MW O Mon power complex. The off-shore gas will be developed by an international consortium of oil and gas exploration companies (Chevron owning 42%, Mitsui Vietnam Petroleum 25.6%, PetroVietnam Exploration and Production 23.5%, and PTT Exploration 8.5%). The gas pipeline will provide more than 4.3 billion cubic meter of gas per year to fuel the power complex's operations. The project connects the gas producer to a ready consumer of the natural gas, thus helping to spur economic development in southern Viet Nam. | |||
| Objectives and Scope | The purpose of the project preparatory technical assistance (PPTA) is to prepare for the construction of a 381 km gas pipeline to provide natural gas from the off-shore gas field to the power plants under construction at the O Mon Power Complex. The Project will not only ensure reliable supply of natural gas for power generation at O Mon power complex but also ensures electricity generation in an environmentally benign manner while continuing to sustain the country's economic growth. The Project also supports public private partnership in construction of the gas pipeline. | |||
| Linkage to Country/Regional Strategy | Viet Nam has experienced strong economic growth of over 7.5% per annum during the past seven years and achieved a gross domestic product (GDP) growth rate of 8.1% in 2006. This strong economic growth has resulted in an electricity demand growth rate of about 15% per annum. This rapid but equitable economic growth has contributed to Viet Nam's success in bringing down the share of population below the poverty line from 58% in 1993 to 25% in 2005. The Government of Viet Nam aims to maintain this level of economic growth till 2010 and to further reduce poverty to 19%. In order to achieve this, GDP growth rate of 7.5% to 8% has to be maintained. To sustain such levels of GDP growth, the installed generating capacity would have to more than double to 26,000 megawatts (MW) by 2010. Electricity growth rate is expected to grow at 15% per annum till 2010 and thereafter at a growth rate of 12% per annum as envisaged under the draft 6th Power Development Master Plan. This growth in electricity demand is fueled by strong industrial growth coupled with strong demand in consumer electrical goods. As a result, Viet Nam is facing a growing deficit in electricity supply and more so during the dry season, given its significant dependence on hydropower. In order to address this imbalance in power supply and at the same time improve the quality and reliability of electricity supply to industrial, commercial, residential and rural consumers in Viet Nam, a total of 30,000 MW of new generating capacity is planned for addition to the power system from 2006 to 2015. Of this planned capacity addition, about 15,000 MW will be new thermal power plants and of this figure, 8,000 MW will natural gas fired power plants. The 2,760 MW O Mon power complex is one of the planned power projects to use natural gas and is included in the 6th Power Development Master Plan of Viet Nam. The O Mon Power Complex consists of four power plants. O Mon I (2 x 300 MW) is financed by JBIC and phase I of this is under construction. The plant will have dual firing capability- fuel oil and later operate on gas when it becomes available 2010. O Mon II (750 MW) will be bid out through competitive bidding in late 2007 as an IPP and to be operational by 2012. ADB will assist the Ministry of Industry (MOI) in this bidding process next year. O Mon III (660 MW) will use F9 gas turbines and will initially run on fuel oil and later switch to gas when it become available in 2010. O Mon IV (750 MW), an EVN power plants, will be financed by ADB in 2008. The offshore gas block is estimated to be have reserves of 4-7 trillion cubic feet of gas (TCF) which is more that sufficient for 25 years of plant operation. Chevron is the operator of this offshore block and has been in discussion with Petro Vietnam and the Government on the gas price, volume of gas to be delivered, pipeline ownership structure, and pipeline routing and other technical specifications. | |||
| Geographical Location | Can Tho Province, Vietnam | |||
Safeguard Categories
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| Environment | A | |||
| Resettlement | B | |||
| Indigenous People | C | |||
| Summary of Environmental and Social Issues | In accordance with ADB's Environment Policy (2002) and Environment Assessment Guidelines (2003), the TA will undertake an EIA and prepare an EIA report including an environmental management plan (EMP), and a summary EIA (SEIA). Public consultations would be carried out during the preparation of the EIA, including consultation on the draft EIA report. The SEIA report will be disclosed 120 days prior to consideration by ADB's Board of Directors. The EIA will also include an assessment of the environmental impacts of gas pipeline construction both on-shore and off-shore. In addition, necessary mitigation measures and environmental monitoring requirements would be incorporated into the EMP. The EMP would also recommend appropriate institutional strengthening and capacity building components for conducting appropriate monitoring mechanisms. | |||
| Consultations Planned or Carried Out | To ensure compliance with ADB's social safeguard policies for involuntary resettlement, indigenous/ethnic minorities, and gender, the TA will assess the resettlement impacts arising from the construction of the gas pipeline and include these impacts and remedial measures into the resettlement plan. As required, detailed field surveys will be conducted to identify any potential social impacts of the proposed construction site to prepare a record of the affected people, an asset inventory, land ownership, resource usage and productivity assessment and data on the existing economic and social conditions of affected people, including a poverty assessment of project affected households. | |||
| Responsible ADB Officer |
Duy-Thanh Bui |
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| Responsible ADB Department |
Southeast Asia Department |
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| Responsible ADB Division |
Energy and Water Division, SERD |
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| Executing Agencies |
Viet Nam Oil & Gas Corporation (PetroVietnam) Nguyen Ngoc Su 18 Lang Ha, Hanoi, Viet Nam |
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| Timetable | ||||
| Concept Clearance | 16 Jan 2007 | |||
| Fact-finding | 11 Dec 2006 to 13 Dec 2006 | |||
| Approval | 19 Mar 2007 | |||
| Financing Plan / TA Utilization |  Top
TA Amount |
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| ADB | Others | Gov | Total | Approved Amount | Revised Amount |
| $975,000.00 | $0.00 | $120,000.00 | $1,095,000.00 | $975,000.00 | $0.00 |
| Total Commitment | Uncommited Balance | Total Disbursement | Undisbursed Balance |
| $395,651.30 | $579,348.70 | $225,202.63 | $749,797.37 |
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