January 16, 2014 / 6:26 AM / 4 years ago

UPDATE 2-Vietnam may delay first nuclear power plant -PM

6 Min Read

* Vietnam could push back construction six years to 2020

* Petrovietnam will have to find more natural gas as shortages loom

* Second nuclear plant slated for 2024-2025 (Adds details of gas supply, development plans, shortages; confirmation from Petrovietnam official)

By Ho Binh Minh

HANOI, Jan 16 (Reuters) - Vietnam may delay construction of its first nuclear power plant to 2020 to ensure safety and efficiency, a step that would mean it needs to find more natural gas to meet rising demand for electricity, according to the country's prime minister.

Talk of the delay comes as Vietnam is already struggling to meet natural gas demand and forecasting insufficient supplies for industrial development plans in its southern provinces.

Vietnam had originally planned to start building the Ninh Thuan 1 nuclear plant in 2014 and start operation in 2023, with help from Russia's state nuclear firm Rosatom.

But Prime Minister Nguyen Tan Dung has now told officials at state-run oil and gas group Petrovietnam the company will have to ensure a larger supply of gas to cover the nuclear delay.

"Petrovietnam must ensure enough gas supply to build a 5,000-megawatt power plant complex to replace 4,000 megawatts of nuclear power," Dung was cited as saying by the official Tuoi Tre (Youth) newspaper in the company's year-end meeting on Wednesday.

Dung urged Petrovietnam in the meeting to start production from block 118 off the east coast of the country to supply gas to an energy complex to be built in the central region, the official Lao Dong (Labour) newspaper reported.

A Petrovietnam official confirmed the news reports and said the state company will develop detailed plans to ensure a sufficient gas supply.

Vietnam plans to build gas pipelines to take 2 billion-4 billion cubic metres (cbm) a year of gas from offshore blocks 117, 118 and 119 over 2016-2025 for a power generation complex to be built in Quang Nam and Quang Ngai provinces, according to a government directive published in 2011.

Domestic annual natural gas output is projected to rise to 14 billion cbm in 2015 and to 15 billion-19 billion cbm a year in the 2016-2025 period, said the directive on the development of the gas sector until 2025.

The development plan also said companies should speed talks, and invest in infrastructure for the import of liquefied natural gas (LNG) to help meet domestic demand, with priority to be given to an LNG terminal in the south.

Southern Shortages

Southern Vietnam, where most major industrial zones are located, is still forecast to face a shortage of 3 billion cbm of gas in 2015, doubling to 6 billion cbm in 2020 and more than 15 billion cbm in 2025, Petrovietnam Gas said in a report on its website.

Petrovietnam Gas is the gas production and trading arm of Petrovietnam.

Petrovietnam said last week it began production of nine new oil and gas projects last year. That helped to push Vietnam's natural gas output in 2013 up 3.5 percent from a year ago to 9.68 billion cbm, government data show.

Petrovietnam Gas plans to complete in 2017 a $220 million LNG terminal in the southern province of Ba Ria-Vung Tau to facilitate the import of 1 million tonnes, or nearly 1.4 cbm, of gas a year, it said in another statement earlier this month.

The Ho Chi Minh City-based firm also planned to invest $650 million in three gas projects in Nam Con Son basin and several offshore oil fields including Dai Hung, Thai Binh and Ham Rong by June 2015 to boost gas supply, the statement said.

Iaea Pledges Help, Urges Caution

Prime Minister Dung's comments came after International Atomic Energy Agency chief Yukiya Amano visited Vietnam last week and pledged to help the country start building the Ninh Thuan 1 plant.

Amano has urged Vietnam to avoid any rush to nuclear power and make sure it was prepared to handle the process, state utility Vietnam Electricity said in a report.

The Ninh Thuan 1 plant with four reactors is to be built in the south-central province of Ninh Thuan, 250 km (155 miles) northeast of Ho Chi Minh City, at an investment of 200 trillion dong ($9.5 billion).

Vietnam has picked a Japanese consortium to develop a second nuclear power plant, also in Ninh Thuan province, with the first two reactors slated to become operational in 2024-2025.

Vietnam plans to produce 15,000 megawatts of electricity, or 10 percent of total generating capacity, through nuclear power by 2030, a senior official of the Vietnam Atomic Energy Commission has said.

Vietnam's current generating capacity is around 32,000 megawatts, and it produced 124.6 billion kilowatt hour of electricity last year, up 8.2 percent from the previous year, based on government statistics.

The country is the fourth-biggest electricity consumer in Southeast Asia, according to a government official.

Dung also said at the Wednesday meeting that he has agreed for Petrovietnam to issue shares for the company operating the Dung Quat oil refinery, Vietnam's first such plant.

He also approved raising the refinery's annual capacity to 10 million tonnes, or 200,000 barrels per day, the Tuoi Tre newspaper said. (Editing by Martin Petty and Tom Hogue)

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