Exclusive: Cambodia scraps coal power project to build gas-fired plant, import LNG

Cambodia’s national flags are seen as labourers work at a construction site in Phnom Penh, Cambodia, October 7, 2016. REUTERS/Samrang Pring/File Photo Acquire Licensing Rights

SINGAPORE, Nov 29 (Reuters) – Cambodia has abandoned plans to build a $1.5 billion 700 megawatt (MW) coal-fired power project in a protected reserve along the southwestern coast and will build an 800 MW natural-gas fired plant instead, its energy minister told Reuters.

As part of the project, Cambodia is exploring construction of a liquefied natural gas (LNG) terminal to import the super-chilled fuel and re-gasify it for use in the power plant, Energy Minister Keo Rottanak told Reuters.

The planned LNG terminal, likely to be a fixed land-based facility, would be Cambodia’s first and would make it a new import market in Southeast Asia. Vietnam and the Philippines took their first shipments this year.

“The Cambodian Prime Minister Hun Manet will announce on Nov. 30 the cancellation of the 700 MW coal power plant project in Koh Kong and the plan to replace it with an 800 MW LNG to be commissioned after 2030,” Rottanak told Reuters.

He did not say how much the gas-fired plant and LNG terminal might cost.

The planned Botum Sakor coal plant had been criticised by environmentalists and some residents for encroaching on some of Cambodia’s densest forest areas, risking the disruption of livelihoods and polluting the reserve, home to dozens of endangered species, with coal dust.

The decision to scrap the coal project, which had been due to start producing power by the end of 2025, reflects the country’s commitment to cleaner power, Rottanak said.

Cambodia wants to lift its share of clean generation capacity to 70% by 2030 from 52% in 2022 by building new solar and wind farms and hydro projects.

“The announcement will be in Cambodia, but it will be a signal to COP28,” Rottanak said, referring to the United Nations annual climate conference that begins this week in Dubai, which Cambodia’s environment ministry officials will be attending.

Cambodia, where power demand has grown about 15% annually in the last decade, has tapped hydropower to address surging electricity demand, unlike other countries in the region such as Malaysia and Vietnam, which have moved towards coal.

Clean power sources, mainly hydropower, have accounted for the lion’s share of the country’s annual electricity use, but Cambodia has struggled with output volatility due to increasingly frequent weather-related disruption to hydropower generation, its main power source.

Cambodia announced about two years ago it would not build any new coal-fired power projects, except for those already under construction.

With the cancellation of Botum Sakor, Cambodia’s only remaining coal power project under development is a long-delayed small-scale 265 MW unit in the northern Oddar Meanchey province.

The Botum Sakor coal-power project was to be built, owned and operated by Cambodia’s Royal Group, a local conglomerate that also has investments in telecoms and transport, and it will now build the gas project instead, Rottanak said.

Royal Group did not respond immediately to an emailed request for comment.

Reporting by Sudarshan Varadhan; Editing by Sonali Paul

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Sudarshan currently reports on the evolving energy landscape in Asia, as the region tries to strike a balance between ensuring reliable electricity supply and fighting climate change. In his previous avatar, he reported on sanctions-era global trade, human rights violations, labor movements, environmental offences and natural disasters in India for six years. During his nine years as a Reuters correspondent, he has attempted to lend a global perspective to small-town issues. Contact: +91 9810393152