Policy changes needed to triple gas sector size in 15 years: WB report

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Vietnam needs better pricing measures and a reserve system in order to triple the size of its gas sector and meet increasing demand, according to a World Bank report released Thursday.

The country's gas sector is facing multiple challenges including greater demand for gas and a potential gas shortage, according to the "Vietnam Gas Sector Development Framework" report.


It calls for a few key decisions concerning the infrastructure and institutions needed to realize the objective of tripling the gas sector in size over the next fifteen years.


The report recommends that from now until 2025, Vietnam should apply various measures to address the uncertainty in the pricing methodology and weaknesses in converting resources into reserves to attract more investment into the sector.


It says the process to explore, refine and distribute natural gas from mines to the market is still not up to date.


Besides, although 88 percent of the gas is currently consumed by the power sector and 40 percent of the total eletricity supply is generated with natural gas, the cooperation between gas and power sectors has not been smooth.


Vietnam needs to create a competitive gas pricing methodology and, eventually, a wholesale competitive gas market.


The Ministry of Industry and Trade should set up an advisory unit in gas policy development, the report suggests.


"Development of the natural gas sector is a key component of Vietnam's overall economic policy and is prominent within the National Strategy for Energy Development," Alain Barbu, Acting World Bank Country Director for Vietnam, is cited as saying in the report.


"Vietnam wants to move toward more competitive markets with more liberalized pricing, and this should be done gradually, so that a stable pricing framework, with linkages to competitive fuel markets, can support the build-out of gas production and infrastructure."


According to the report, Vietnam's gas sector has great potential which can be realized by 2025 with concerted and coordinated efforts by public agencies and private partners.


Natural gas now meets over 15 percent of the country's primary energy demand.


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