Vietnam should gradually abolish monopoly in the gas sector to boost its development as the sector generates up to 26.5 per cent or 3,223 MW of the country’s total power capacity but the country has no competitive market for the gas sector, said Roland Priddle, a leading energy expert of the World Bank.
Similar to the current monopoly in the power sector, the gas sector now has many sellers – the world’s leading exploiters such as BP, Chevron, Santos and Talisman, which have been exploiting or coordinating with others to produce the product then sell to the sole buyer, cum distributor, PetroVietnam, Roland Priddle said at a meeting last week in Hanoi.
He noted that instead of applying a competitive gas purchasing price negotiation, PetroVietnam buys gas at agreed prices at gas fields then builds gas pipelines for each projects and distributes the product. Gas price negotiation for each project is slowly proceeding, and only via PetroVietnam. Therefore, in order to develop the gas and power markets, the country should limit monopoly in gas selling and purchase, and gas price fixation of PetroVietnam.
According to the government’s targets set for the gas sector from now until 2025, gas use will be diversified for both power production and non-power production activities.
The Japanese Energy Economic Institute forecast that Vietnam’s energy demand will surpass its supply in 2015 as the country’s total power consumption will grow 17 per cent annually and its energy demand remains higher than its GDP growth.
The WB estimated that Vietnam will need to develop an additional huge gas reserve in the next 16 year that is 2.2 times higher than the country’s current reserves of 200 billion cubic meters.
With the large gas reserve but annually low production capacity of seven billion cubic meters, PetroVietnam’s monopoly in gas selling and buying should be removed to catch up with the need to restructure the power sector is urgent, said the WB.
The WB also proposed the setup of the Oil and Gas Department to manage and regulate upstream activities like the Electricity Regulation Agency of Vietnam (ERAV) under the Ministry of Industry and Trade (MoIT), and make PetroVietnam become an intermediary in gas purchase and providing value added services for gas buyers and sellers. (Saigon Economic Times)
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