Regional Coal: PV Coal to start imports in 2014

Vietnam has started to look for coal resources abroad to develop the coal-fired power plants that will become the country?s number one energy source in the future, replacing hydro and gas power.

Coal-fired plants account for about 12 percent of Vietnam?s 18.5GW capacity. This is expected to rise to 32.3GW by 2020, overtaking gas and hydropower.

Petro Vietnam Coal Import and Supply Company, also known as PV Coal, is a unit of the Vietnam State Oil and Gas firm Petro Vietnam (PVN). PV Coal is currently looking for coalmines outside the country, including in Indonesia and Australia.

?Coal from Indonesia and Australia have their own characteristics and qualities. We don?t discriminate between them or classify one as better than the other,? PV Coal Managing Director, Nguyen Xuan Hoa, told Petromindo.Com recently in Singapore.

Nguyen said that since last year, Vietnam has imported coal from Indonesia through the Independent Power Producers (IPP), who run small-scale power projects in Vietnam.

As a result of being assigned by the Vietnam government to develop six coal-fired power plants with total capacity of 7,800MW, PVN set up PV Coal in 2009 with the aim of securing long-term and stable sources of coal for these plants.

PV Coal now is a fully owned subsidiary of PVN, incorporated and based in Ho Chi Minh City,Vietnam.

PV Coal?s main activities are: investing in overseas coal mines; importing and supplying coal for the country?s internal and external oil and gas corporations; trading coal at home; supplementing clear energy mechanisms on coal and electricity energies; and conducting other tasks when required by the Vietnam State Oil and Gas Corporation.

PV Coal plans to start coal imports to supply their power projects in Vietnam in 2014, with the import volume reaching 1.5 million tonnes. This would gradually increase to between 13.5 and 15 million tonnes by 2018, Nguyen said.

Although the company is a new player in the business, PV Coal plans to acquire coal mines abroad, including those in Indonesia and Australia, he said, adding that in its grand strategy, the company would look for local partners in the coal source countries to form joint ventures to carry out the coal mine acquisitions. ?We?re looking for capable and reliable partners,? he added.

?We would at least want to be a majority shareholder in a joint venture firm,? he said.

For the coalmine acquisitions, PV Coal prefers ?green-field? ones with minimum reserves of at least around 30 to 50 million tonnes, Nguyen said, adding that the coal?s caloric specifications would not matter. ?If they?re low-caloric ones, we could make the product blending coal,? he said.

He said that PV Coal has conducted some preliminary studies on mining acquisitions in Kalimantan, as well as South Sumatra. ?But none of them are final,? he said, without giving further details.

PV Coal has also welcomed coal import suppliers, Nguyen said, adding that the company expects the suppliers to contact PV Coal to ease their way to sell coal straight to potential buyers in Vietnam.

?We offer more benefits to coal import suppliers, because we know the business conditions in Vietnam,? he said. (denny)