A feasibility study has shown that a proposed oil pipeline designed to connect Hon La Harbor in Vietnam to Kammuan province in Laos, will reduce petroleum prices for the country significantly.
As previously reported by The Laotian Times, the Laos-Vietnam oil pipeline project is an ambitious plan to import diesel and petrol fuels to Laos from Vietnam by way of a 306km pipeline.
The study has been submitted to the Lao government for consideration, and suggests that gasoline prices in Khammuan province would be reduced by as much as 600 kip per litre – 7,500 kip per litre to 6,900 kip – once the project is fully functional by 2026.
During a signing ceremony in April, governments from both countries endorsed a Memorandum of Understanding for the construction project of the Hon La Oil Stockpile and an oil pipeline from Hon La Harbour in Vietnam’s Quang Binh province to Laos’ Khammuan province.
Petro Lao has also recently submitted a request to the Ministry of Industry and Commerce, to present the research data of the feasibility study and the project’s concept next month.
According to the feasibility study certified by both British and Vietnamese consulting firms, the project is to cost an estimated US$380 million and has identified four main facilities to be developed under the project.
They are Hon La Harbour and Hon La Oil Stockpile in Vietnam, a 306 km oil pipeline from Hon La to Thakhek, capital of Khammuan province and an oil stockpile to be built in Thakhek district.
Once the government gives approval to develop the project, Petro Lao says it will seek joint venture partners. Officials have stated that the project is expected to be 100-percent invested by Lao petroleum companies.
An official of the project, Mr Veth stated, “Some companies have expressed their interests in joining the project development. We are currently opened to welcoming business partners.”
However, in the case that there are no other companies interested in a joint venture, Mr Veth has claimed that Petro Lao is financially capable of solely investing in the project.
Statistics gathered from 22 petroleum companies around the country have shown that just 1.2 billion litres of oil were imported into Laos in 2015.
Once the project has completed, studies estimate that 2.5 billion litres of refined oil will be imported annually, doubling the current amount of Lao useage.
The project will be set in two phases, with Phase I consisting of the construction of the harbour and Hon La Oil Stockpile, scheduled to be completed in 2019. Phase II will see the construction of an oil pipeline and oil stockpile in Thakhek.
Once Phase I is completed, oil can be imported directly from Singapore to Hon La Stockpile, then imported to Laos by land. Oil prices will be reduced due to eliminating the middleman, saving importers on transport costs, resulting in lower gas prices for consumers.
Read more about the pipeline here: https://www.laotiantimes.com/2017/01/05/laos-vietnam-oil-pipeline/