VINACHEM

State oil and gas group Petrovietnam is looking to buy around 10 million tonnes of coal a year, mostly from Australia and Indonesia, to feed domestic thermal power plants from 2017, a company official said on Monday.

Vietnam, a net coal exporter, has been cutting its annual export volumes of the fossil fuel in recent years to fill growing demand from coal-fired power plants at home. Domestic output has also been falling after decades of mining activity.

"We have to feed three thermal power plants, with operation slated to start from 2017," said the official at Petrovietnam Power Coal Import and Supply Co (PV Power Coal), the importing arm of the state group.

The plants, two of which are being developed in the Mekong Delta in the country's southern region and another scheduled in the central province of Quang Binh, need a combined 10 million tonnes of coal annually, he said.

Most of Vietnam's coal reserves lies in the northern region, including Quang Ninh province, the coal hub, and in the Red River basin, where most of the thermal fuel remains untapped.

PV Power Coal has signed initial framework agreements for a combined annual volume of up to 12 million tonnes with mining firms in Indonesia and Australia, including Australia's Ensham Coal Sales, the Vietnamese company said in an undated statement.

Apart from Petrovietnam, Vinacomin, the country's top mining group, has also been building coal-fired power plants. It is seeking to buy coal from Australia and Russia, and has already been importing a small volume of Indonesian coal since 2011.

Last year Vietnam's coal exports dropped to 12.8 million tonnes, down nearly 16 percent from 2012, based on government data. The country does not publish coal import data in its official statistics.

Coal accounts for a third of Southeast Asia's energy mix and natural gas for 44 percent, according to the International Energy Agency (IEA), which formulates energy policy for industrialised countries.

Power generation capacity in the region is set to rise by 50 percent during the current decade, of which more than half will be coal-fired, the IEA said in December.