Vietnam state-owned 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, according to Reuters.

Vietnam, a net coal exporter, has been cutting annual export volumes to fill growing demand from coal-fired power plants at home. Domestic coal output has also been declining after decades of mining activity.

Last year Vietnam’s coal exports dropped to 12.8 million tonnes, down nearly 16% from 2012.

Coal accounts for about a third of South East Asia’s energy mix and natural gas about 45%. Power generation capacity in the region is set to rise 50% during the current decade, of which more than half will be coal-fired.

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

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

Most of Vietnam’s coal reserves are 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 a statement.

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

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