PVN mobilizes maximum natural gas to supply electricity production

Oil and gas workers work day and night at the PM3 Gas System - Ca Mau , ensuring a stable and effective gas source.

This year, PVN is expected to supply 5.87 billion m3 of natural gas for electricity production, exceeding 104.8% of the plan of the Ministry of Industry and Trade .

Buy more gas from joint venture project with Malaysia

According to PVN, using natural gas to produce electricity, fertilizer and for industrial production is very popular in Vietnam. This is a clean energy source, helping manufacturers save costs, reduce environmental pollution and is also a special commodity, exploited mostly from gas fields in the continental shelf of Vietnam.

After exploitation, natural gas is transported via gas pipelines to shore and distributed to customers including power plants, fertilizer plants, and industrial customers concentrated in the Southeast and Southwest regions.

Accordingly, PVN believes that to develop and put gas fields into exploitation requires synchronous development of gas pipelines and consumer systems and it will take many years for the project chain to be completed.

In the plan for electricity supply and operation of the national power system nationwide in 2023 issued by the Ministry of Industry and Trade in Decision No. 2976/QD-BCT dated December 30, 2022, electricity output produced from natural gas accounts for about 10.4% of total electricity output. PVN and parties in the gas system will provide about 5.6 billion m3 of gas (Southeast region about 4.3 billion m3 and Southwest region about 1.3 billion m3).

After maintenance, Phu My Fertilizer Plant operates stably, ready to fully supply goods for the summer-autumn/rainy season.

In fact, the demand for gas mobilization for electricity production in the first quarter was low. By the end of April, the amount of gas mobilized for power plants only reached 96% of the plan assigned by the Ministry of Industry and Trade.

Faced with the increasing demand for power system loads, PVN and parties in the gas system have coordinated to implement technical solutions to maximize the amount of natural gas exploited domestically. At the same time, PVN has agreed with Petronas to purchase all the gas exploited from the PM3-CAA field cluster with Malaysia to increase the amount of gas supplied for domestic electricity production.

With the above efforts, this year the group is expected to supply about 5.87 billion m3 of natural gas for electricity production (including 4.55 billion m3 in the Southeast region and 1.32 billion m3 in the Southwest region), exceeding 104.8% of the plan of the Ministry of Industry and Trade.

PVN also said that the highest capacity mobilized by gas-fired power plants only accounts for about 12% of the total capacity of mobilized power sources. To ensure the completion of the Ministry of Industry and Trade's power supply plan, the commanders and operators of the power production, transmission, and distribution systems must mobilize other power sources such as coal power, hydropower, and renewable energy.

Farmers use Ca Mau fertilizer, contributing to ensuring the country's food security.

Food security must be ensured.

According to information from PVN, from 2006 to present, fertilizer plants in the Southeast and Southwest regions have used natural gas as input material for production and have no alternative materials.

Specifically, Phu My Fertilizer Plant and Ca Mau Fertilizer Plant have a stable gas consumption demand of about 1.1 billion m³. Every year, businesses coordinate with suppliers to plan for gas usage demand; plant maintenance and repair plans to optimize gas supply, complying with strict regulations under long-term gas purchase and sale contracts.

In addition, the owners of these two factories are joint stock companies, so any activities that affect production and business efficiency, or in case of long-term gas supply suspension/reduction as planned, must be approved by the General Meeting of Shareholders of this enterprise before implementation.

Ca Mau Gas - Power - Fertilizer Complex

PVN affirmed that the unplanned suspension/reduction of gas supply to these plants will have a huge impact on production and business activities, causing many consequences for related parties and depending on the approval, goodwill, and cooperation of shareholders. In addition, the suspension/reduction of natural gas from fertilizer plants will not help much (nearly 1%) to ensure the operation of the national power system.

Meanwhile, in 2022, the total export turnover of the fruit and vegetable and rice industry for Vietnam will be over 6.6 billion USD. Accordingly, the two fertilizer factories of Ca Mau and Phu My must participate in producing enough fertilizer output according to the annual plan, to ensure supply for agricultural production sectors, contributing to ensuring the country's food security, and increasing the export value of the country's fruits and vegetables.

To maintain long-term natural gas supply and ensure national energy security, PVN recommends that agencies consider and issue a mechanism to develop a stable and safe baseload power source for the system.

Regulations on power system operation in accordance with the natural gas purchase commitment mechanism and reasonable electricity price policy will help power plant investors feel secure in signing long-term gas purchase contracts, especially when cheap domestic natural gas sources are increasingly depleted and the price of imported LNG sources is increasing.

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