Tokyo Gas to Set up LNG Venture in Vietnam
Tokyo Gas is expected to form a joint venture in Vietnam to expand to explore opportunities in the LNG value chain.
According to Nikkei, the Japanese company is expected to form a joint venture with state owned PetroVietnam Gas and others as early as this month. Tokyo Gas will have a stake of about 10-20 percent in the venture. PetroVietnam Gas will hold a majority stake while other partners are expected to include a local construction company.
The joint venture will launch feasibility studies to explore the possibility of building an LNG plant for storage and pipelines to create a supply network. Tokyo Gas will utilize its technologies and expertise in total energy businesses. If the studies look promising, the scale of the joint venture likely will be expanded, Nikkei reported.
Demand for gas in expanding rapidly in Southeast Asia and Vietnam is no exception. LNG is in demand as an energy source for industrial parks around Ho Chi Minh City in the country's south. There are plans to build LNG facilities, including at the port of Thi Vai near the city, Nikkei added.
Expectation of robust energy consumption growth has attracted other global majors to the region as well. In May, Italy’s Enel and the Japan’s Marubeni Corporation said they will together explore for opportunities in the gas generation sector in the Asia-Pacific region.
Energy landscape in Southeast Asia is undergoing a major shift as domestic demand continues to race ahead. According to International Energy Agency (IEA), as domestic natural gas demand outpaces indigenous production, intra-regional and intra-country trade increases, Southeast Asia will turn into a net gas importer of around 10 bcm by 2040, compared with net exports of 54 bcm in 2013.
IEA says electricity demand would almost triple by 2040, an increase greater than the current power output of Japan. Although coal still remains the dominant fuel, greater focus on pollution reduction will lead to demand growth in gas fired power plants.