The 22-in diameter pipeline will run from PetroVietnam's gas facility in Ba Ria Vung Tau province to Nhon Trach power complex in Dong Nai province. Nhon Trach, 70km north of Ho Chi Minh City, is where the government plans to build gas-fired power plants with a total generation capacity of more than 2,600MW, the PetroVietnam official said. "The construction of this new pipeline will allow PetroVietnam to boost its gas production in the fields offshore Ba Ria Vung Tau province," he pointed out. The pipeline will supply gas to a yet-to-be-built 450-MW power plant in Nhon Trach by March, 2008, and it will also deliver gas to an existing 375-MW plant, which currently runs on oil. "Two more gas-fired power plants, each with an output capacity of 720MW, will be built by BP and Singapore," the official said. He added that PetroVietnam will boost the capacity of the pipeline to 3.8bn cum/yr after 2008. Vietnam has abundant natural gas resources, but a lack of pipelines to fuel power plants or other industrial facilities is limiting the growth of the country's gas sector. "This is the first time we are building a pipeline in Vietnam, and we are looking to build more in the future," said Peter Gregory, managing director of Nacap. He went on to say that in recent years, Nacap has become a prominent player in the pipeline building business. "We have built 370km of oil pipelines in SE Asia since 2002, or 80% of all pipelines built during this period," he said. Demand for electricity in Vietnam is expected to grow by 15% a year between 2006 and 2010, and the country is planning to build more gas-fired power plants in the coming years, said an official with state-owned Electricity of Vietnam. Currently, BP Exploration is operating the only gas pipeline in Vietnam, with a capacity of more than 3.2bn cum/yr, to fuel the 3,860-MW Phu My power complex, currently the country's largest. In March this year, BP Exploration signed a deal with the Vietnamese authorities to supply natural gas from its Nam Con Son gas project via PetroVietnam's Phu My facility to the Nhon Trach power complex. The country is expected to start operating its second gas pipeline in early 2007. The 325-km long, 18-in diameter, pipeline is currently being built by 50-50 Russian-Vietnamese joint venture Vietsovpetro to transport 2bn cum/yr of gas from its PM-3 offshore fields to the Ca Mau gas-power-fertilizer complex. The fields are located in an overlapping area between Vietnam and Malaysia. Currently, Vietnam is estimated to have more than 1,300bn cum of gas reserves; last year, it produced 6.34bn cum of natural gas, an increase of 1.2% on 2004.