Gas project runs into more strife
The US$1.8 billion Nam Con Son gas project, which has already taken four years to negotiate, is likely to suffer further delays because of a dispute over construction of a $390 million pipeline.
The Saigon Times reported yesterday that remaining partners in the project, a plan to exploit gas fields in the South China Sea, have failed to reach agreement on the allocation of stakes in the pipeline following the recent withdrawal of US giant Mobil and Australia's BHP.
Following the withdrawal of the two foreign oil and gas firms, the state-controlled Petro Vietnam increased its stake in the pipeline from 37 to 50.4 per cent.
But the remaining partners - British Petroleum, Norway's Statoil and Tomen of Japan - had urged Petro Vietnam to find other stake holders, arguing its enlarged share would make it more difficult to arrange financing for the project.
Japan's Eximbank had indicated a willingness to lend up to $170 million for the project, but with Tomen's stake remaining at just 12.4 per cent, the bank is reportedly reluctant to disburse the loan.
Several local banks have pledged to lend Petro Vietnam $100 million, but are unsure if they can provide further long-term capital.
Production of gas from the field - thought to contain enough to swell Vietnam's electricity output by 13 billion kilowatt-hours or more than 50 per cent of the country's current capacity - had been scheduled to begin in early 2002.
VIETNAM
