3.

Selection of Optimum Power Plant Type

3. Selection of Optimum Power Plant Type

3.1. Fuel for Power Plant

3.1.1. Available Fuels

Fuels for thermal power plants are generally heavy fuel oil, diesel oil, naphtha, natural
gas, liquefied natural gas and coal.
For this project, heavy fuel oil and diesel oil are suitable at present and natural gas
will be added in near future as described below.

(1) Heavy Fuel Oil, Diesel Oil and Naphtha

Commercial energy sources currently consumed in Cambodia are mostly liquid

fuels, all of which are imported. In 1995, Cambodia imported gasoline of 36,000
tons of oil equivalent (21.7% of the total quantity of imported liquid fuels), kero-
sene of 41,000 tons of oil equivalent (24.7%), diesel oil of 40,000 tons of oil
equivalent (24.1%), heavy fuel oil of 46,000 tons of oil equivalent (27.7%) and
others of 3,000 tons of oil equivalent (1.8%). (Source : Energy Statistics Year-
book 1988 ~ 1995, the United Nations)

Among the imported fuels, diesel and heavy fuel oils can be used as fuels for
power plants. Naphtha, which IPP2 had considered as the main fuel, is available
in Singapore (note : IPP2 contract has been suspended). However, it has no ad-
vantage compared to diesel oil because of higher price and more difficult han-
dling. As of December 1999, the prices of fuels are as follows; Naphtha : 5.0 $/
MMBTU, Diesel oil : 4.6 $/MMBTU, Heavy fuel oil : 3.5 $/MMBTU.

Cambodia imports mainly those fuels from Singapore, Thailand and Vietnam,
and there are several oil companies to deal in petroleum products, such as So-
kimex, SHELL, CALTEX, TELA, CUPL, etc. in Cambodia.

Imported petroleum products are transported by ship, and unloaded at Sokimex Oil
Terminal that is located near the site for the Project, or transported by barge from

3-1
Vietnam to Phnom Penh through the Mekong River and unloaded there. The un-
loaded petroleum products are transported by tank car to each consumer such as
power stations. Most of the tank cars have a capacity of 12 or 16 kl, and Sokimex
has 5 tank cars with a capacity of 38 kl. Transportation of fuel oils by rail is also
available because a siding of the railroad between Sihanoukville and Phnom Penh
is routed through in Sokimex Oil Terminal. However, almost all of the rail cars re-
quired repairing due to superannuation. There are 34 rail cars with a capacity of 72
kl.

Sokimex Oil Terminal handles gasoline, diesel oil and heavy fuel oil, and the
jetty of Sokimex Oil Terminal is used to unload petroleum products not only for
Sokimex but also for SHELL, CALTEX and TELA. Sokimex Oil Terminal has
never handled naphtha but Sokimex has an intention to deal with naphtha if there
is a demand for it. The storage capacity of Sokimex Oil Terminal is 16,200 m3
for heavy fuel oil (tank : 3 × 5,400 m3), 49,500 m3 for diesel oil (tank : 1 × 10,500
m3 and 6 × 6,500 m3) and 6,060m3 for gasoline (tank : 2 × 2,000 m3 and 2 ×
1,030 m3) and total 72,000 m3. Furthermore, Sokimex has a plan to increase the
capacity to 172,000 m3. In addition, a storage tank with capacity of 25,000 m3
was constructed in 2000 and 3 tanks with the same capacity are under planning.
These tanks will be used for diesel oil. The new jetty to accommodate tankers up
to 46,000 DWT was inaugurated in April 2001. Sokimex has a plan that the ex-
isting unloading facilities including under-sea pipe for tankers up to 5,000 DWT
will go out of use after completion of the extension.

Sokimex Oil Terminal has one jetty (4.2 m deep completed in 1979) with the ca-
pacity to accommodate tankers up to 1,500 DWT. The rest is floating buoy asso-
ciated with undersea pipe, build under an agreement between Sokimex and
SHELL for temporary use with the capacity to accommodate tankers to the
maximum of 5,000 DWT. The unloading time of 1,500 DWT tankers and 5,000
DWT tankers are about 6 hours and 12 to 16 hours respectively.

3-2
(2) Natural Gas

(a) Development in Undisputed Cambodian Territory

(i) Current Status of Gas Development

So far, oil and gas wells with commercial scale have not been developed
in Cambodia.

In 1998, after poking around for seven-years, the four foreign firms that
had drilled a total of nine wells in potential oil and gas fields offshore
Cambodian territory, however they have walked away from their in-
vestments in Cambodia, because they had not found much oil/gas, and
collapsed world oil prices had made exploration in Cambodia less inter-
esting.

Although Australia based oil firm Woodside Petroleum Ltd. signed a

Production Sharing Contract (PSC) with the Cambodia Government on
Blocks 5 and 6 offshore, and completed the 2D seismic study, but no
drilling, in 1998, they have relinquished Blocks 5 and 6, because of low
prospectivety.

In June 2001, the Cambodian Government and Woodside are going to

make new exploration agreement on new area within Blocks 1 ~ 4 cov-
ering Koah Tang, Koah Pring, Apsara, Poulo Wai, Angkor and DA
(Refer to the dotted zone on Fig.3.1-1).

Woodside expects recoverable gas reserves of 2.7 TCF in this area using
the past available data (Refer to Table 3.1-1).

As gas consumption for 180 MW gas turbine combined cycle power

plant is approximately 10 BCF/year, the most powerful reservoir Ang-
kor-1 may serve the gas to the plant more than 55 years.

Woodside assumes the average capacity and life of prospective wells

approximately 3.5 BCF and two years respectively, because of relatively
small capacity of each gas reservoir. These figures mean that approxi-
mately one hundred wells shall be drilled for 180 MW with 25 years
plant life taking into account of the success rates as exploration and de-

3-3
 velopment wells. After signing of the contract, Woodside will start
seismic analysis and well drilling for exploration, appraisal and devel-
opment. As per their latest information, two exploration wells will be
drilled in the first quarter of 2002 initially and after that four wells will
be added and commercial operation is expected in 2006. As shown in
Fig.3.1-2, it takes about 4 to 5 years up to commercial production.

Despite CNPA expected to sign the contract with development firm in

July 2001, contract signing is delaying because of an uncertainty of gas
price which is linked with future gas demand in Cambodia.

As several hundreds millions of dollar for platform, wells and pipeline

cost shall be recovered by the gas price, this cost determines gas prices.
And if resultant gas price is excessive high the negotiation comes to a
deadlock.

Table 3.1-1 Recoverable Gas Reserve

Field Natural Gas (BCF)

Koah Tang 335
Koah Tang Southwest 260
Koah Tang Northeast 255
Total of Koah Tang Fields 850
Koah Pring East-1 137
Koah Pring East-2 91
Total of Koah Pring Fields 228
Koah Poulo Wai North 150
Koah Pulo Wai 260
Total of Koah Poulo Fields 410
Apsara 1 312
Angkor 1 577
Da 1 309
Total of Aspara, Ankor and Da Fields 1,198
Grand Total 2,686
(BCF : Billion cubic feet) (Source : CNPA)

3-4
OVERLAPPING ZONE

6
Ⅱ
7 ■ Sihanoukville

5
● B1-1
● Koah Tang-1 4
● Koah Pring-1
Apsara-1 ● ● Devada-1 3
H-1 ● ● Poulo Wai-1
Bayon-1 ●● Angkor-1
● Preah Kahn-1
Ⅲ DA-1 ● 2
● L-1

Ⅳ 1
New Development Zone

100 km

Fig.3.1-1 Gas and Oil Blocks (Offshore) in Cambodia

3-5
PSC Commercial
Sign Operation

1st year 2nd year 3rd year 4th year 5th year

Exploration Appraisal
Seismic
Drilling Development
analysis
(proving)

Fig.3.1-2 Natural Gas Development Schedule

(ii) History of Gas and Oil Development

The history of gas and oil development in Cambodia is not so long and
started from 1950s when natural resource surveys were carried out off-
shore and on land by France, China, Poland, the former Soviet, etc.
However, the survey was not full-scale and was carried out in a small
way only in specified areas.

The activities have been full-scale since 1969. The Cambodian Gov-
ernment of those days gave the right of oil exploration to French com-
pany and this marked a turning point in survey activity.

From 1969 to the beginning of 1970, Elf Aquitaine, a French company,

carried out seismic surveys in Gulf of Thailand and drilled 3 trial wells.
However, each well was dry and obtained no good result. Elf Aquitaine
and Esso, as a consortium, carried out seismic surveys and drilled 2
wells in 1974 and discovered small-scale oil wells.

However, oil surveys declined rapidly and were suspended completely

after that because domestic warfare got serious.

Geological surveys all over the country restarted from 1988. Gas and
oil reserves were not discovered, but potential possibilities were prom-
ising. At that time a team of Russian geologists carried out investiga-
tions and made the judgment that there is potential possibility of gas and
oil reserves in 6 areas of sedimentary rock. The East West Center esti-

3-6
mated that reserves of crude oil and natural gas are 50 to 100 million
barrels and 1,500 to 3,500 billion ft3 respectively.

According to the Comprehensive Peace Agreement at the international

conference of Paris held in October 1991, Cambodia determined to re-
start large–scale development of gas and oil reserves. The Ministry of
Industry took a step of opening petroleum field to foreign oil developers
and put licenses of exploration out to tender. The investigation zone is
the sedimentary rock area that the Russian team believed to be promis-
ing and is divided into 26 blocks (7 offshore blocks and 19 onshore
blocks).

At the beginning, many companies declared their intention to make a bid

but later declined due to insecure political situation. In 1991, the fol-
lowing 3 groups and 1 developer got licenses.

• Consortium among Enterprise Oil Exploration (UK 40% of invest-

ment ratio), Total (France 30%), British Gas (UK 20%) and Com-
pagnie Europeanne des Petroles (France 10%) :
Areas are Block 1 (4,700 km2) and Block 2 (4,900 km2) located about
150 km offshore southwest from Sihanoukville Port.
PS Agreement for a period of 30 years
Oil layer was discovered in Block 2 in 1994 and overall data acquisi-
tion started from September.

• Japan National Oil Company, JAPEX and Nisshoiwai (Japan):

Area is Block 3 (4,000 km2) located about 130 km offshore Gulf of
Thailand
The existence of oil was recognized in January 1994 but it was small-
scale and not commercial. 2nd well is under drilling.

• Consortium among Premier Oil Pacific (UK 33.3% of investment ra-

tio), Idemitsu (Japan 33.3%), Empolex (Australia 33.3%) :
Area is Block 4 (4,775 km2) located offshore Gulf of Thailand.
Oil well was discovered in March 1994.

• Nawa Oil (Hungary) :

Areas are Block 5 located offshore Gulf of Thailand and Block 9 lo-

3-7
 cated onshore.
It withdrew entirely due to nonfulfillment.

Subsequently, 2 offshore blocks and 18 onshore blocks were put to ten-

der in 1992 and 4 groups, Cairn Energy (UK), Marimex BV (Nether-
lands), Technitrade International (Netherlands) and a Taiwanese con-
sortium of Overseas Petroleum Co. and Chinese Petroleum Co. were ap-
proved to get licenses for investigation. However, the Taiwanese con-
sortium withdrew just before contract and 2 Dutch companies were can-
celled because they could not prepare and mobilize within a definite
period of time though they had signed contracts.

(iii) Government Office related to Oil and Gas Management

In December 1998 the Cambodian Government integrated former or-

ganizations, established the Cambodian National Petroleum Authority
(CNPA) and gave it responsibility for overall control of petroleum from
oil exploitation to marketing.

Fig.3.1-3 shows the organization chart of CNPA.

3-8
 Chairman

Vice Chairman

Direct General

Support Staff &

Advisory Team

Legal &
Upstream Administration Downstream
Negotiation
Department Department Department
Department

Refinery &
Oil & Gas Negotiation &
Administration Petrochemical
Exploration Contract
Industry

Reservoir Accounting & Import &

Legal Aspect
Engineering Finance Export

Engineering &
Personnel Distribution
Development

Data
Management &
Mapping

Research & Health, Safety &

Laboratory
Information System Environment
National
Petroleum
Company

Royal Decree on the Nomination of the Board of Management for

the Cambodian National Petroelum Authority

Fig.3.1-3 Proposed Organizational Chart of Cambodian National Petroleum Authority

3-9
(b) Development in Overlapping Area

There are overlapping claims by Cambodia and Thailand to one offshore

area where significant quantity of gas is expected, because these are just on
the geological extension of the area where Thai gas wells have been devel-
oped. Reserves in this area are estimated about 9 TCF by a Japanese oil firm.

Each government has issued a license to different four foreign joint ventures
for exploration of oil/gas in the early 1970s, but the dispute of the territory
has prevented any exploration.

After 30 years over argument, both countries signed an agreement on poten-

tial oil/gas exploration in a 27,000 km2 area in June 2001.

The Memorandum of Understanding (MOU) on the “Overlapping Maritime

Claims” states;

1) Neither country can allow oil/gas drilling until each agrees on a resolu-
tion to the dispute
2) Split revenue between two countries 50/50
3) Set up a joint committee to continue working toward a solution for the
next six months

This MOU may break the deadlock over the overlapping claims and there
might be much progress, but states only basic standpoint.

On the other hand, the priority of the Thailand Government concerning

gas/oil development is;

1st ................Thai/Malaysia overlapping zone

2nd ...............Renovation/Exploration in/around existing wells
3rd or 4th .....Thai/Cambodia overlapping zone

This means that Cambodian committee member should take stronger leader-
ship to accelerate the developing schedule which has a tendency to a tremen-
dous delay normally.

3 - 10
(c) Import from Neighboring Countries

(i) Import from Thailand

At present Thailand seems to be most likely gas supplier to Cambodia

because Thailand has many existing and many developing gas fields in
the Gulf of Thailand (refer to Fig.3.1-4), and produced natural gas in
this area can be transferred directly to Sihanoukville by offshore gas
pipeline.

The JICA Study Team has contacted with and obtained some informa-
tion from Mitsui Oil Exploration Company (MOECO) who is one of the
main gas suppliers in Thailand. MOECO is producing natural gas in the
Gulf of Thailand and supplying it to PTT (Petroleum Authority of Thai-
land) in the form of joint supplier with Unocal Thailand, Ltd. Unocal-
MOECO co-venture is the largest gas producer in Thailand. They sup-
plied natural gas of around 1,000 MMCFD to PTT in 1999; this amount
corresponded to about 60 % of total demand of Thailand in 1999.
Therefore Unocal-MOECO is considered to be the most possible gas
supplier to Cambodia.

MOECO suggests that they could afford to supply natural gas to Cam-
bodia in future from the viewpoint of their ample production capacity.
However, to import natural gas from Thailand, there some issues to be
concluded as described below:

{ The partner of co-venture, Unocal, is one of the members of 4-

company’s group that plans to built a gas turbine combined cycle
power plant in Sihanoukville. Unocal joins with this group as fuel
supplier. Therefore they have to dissolve firstly their agreement of
co-development of IPP so that they may become gas supplier for
this Project.

| In general, for import of natural gas from other countries including

Thailand, the agreement on fuel trade between two concerned
countries will be necessary. This kind of agreement usually would
take a long time to conclude unless an interest of country accords
with each other; namely,

3 - 11
 } At present the supply capability of natural gas in Thailand has an
enough margin over the demand due to the recent economic depres-
sion in Thailand and import of Yadana gas from Myanmar that has
commenced in the late last year. However, due to the recent Thai
government policy to promote utilizing natural gas and gradually
drying up of the existing fields, it is assumed that several new gas
resources with ample capacity will be required to be developed after
the year 2007- 2008. This time of 2007-2008 might correspond to
the time of completion of Sihanoukville Power Plant. Therefore it is
expected that Thai government would be reluctant to supply natural
gas to Cambodia.

~ The demand of natural gas in the Project is rather small for com-
mercialization of gas supply from Thailand. Approx. 300 km length
gas pipeline would be required to be constructed from the existing
gas fields to Sihanoukville. The length of 300 km itself is unlikely
so long, but smaller size of pipeline needs a higher construction cost
per unit volume of transferred gas. Unocal suggested to MIME that
a minimum electric generation capacity to assure economic viability
would be around 300 MW.

To realize the supply of natural gas from Thailand in time, the above is-
sues should be concluded soon.

(ii) Import from Vietnam

The natural gas to Vietnam is now supplied solely from the offshore gas
fields located in the South China Sea. Meanwhile, in Vietnamese territo-
ry in the south of the Gulf of Thailand, some developers are working to
develop new gas resources. Joint developer of MOECO/Unocal/
PTTEP/PVE is one of these developers, and they have a plan to supply
natural gas from this area to power stations that are located or to be lo-
cated in future in the Mekong delta area of Vietnam.

In 2000, they have drilled seven test wells in total in the western offsho-
re area of Vietnam, approx. 300 km apart from Sihanoukville. Accord-
ing to their test well results, they estimate that the recoverable gas

3 - 12
 volume may be around 1 ~ 5 TCF. They intend to supply this natural
gas to the second stage of O Mon Power Station (300 MW) and IPP
power station(s) from 2007-2008. However, at present, the construction
of the second stage of O Mon Power Station is not yet finalized to con-
struct, furthermore there is no specific plan about IPP at present.
Therefore they are now seeking specific consumers for realizing this
project and consider supplying to Cambodia as one of the feasible op-
tions. But this option may also have a political complexity depending on
the intention of Vietnamese government as the case of Thailand de-
scribed above.

As discussed in the above, regarding the possibility of natural gas, all options, i.e.
the development in Cambodian territory, the development in overlapping zone
and the import from Thailand or Vietnam, have several kinds of issues to be
solved at present. A common key issue that is related to all options is a low
economic viability which is arisen from a relatively small size of gas demand ex-
pected in Cambodia. Therefore, increase of demand requirement, with introduc-
ing a gas-consumed industry as well as a power generation, would be the most
effective factor, which accelerates the realization of development or import of
natural gas.

3 - 13
Fig.3.1-4 Natural Gas Fields and Gas Pipelines of Thailand

3 - 14
(3) Liquefied Natural Gas

Liquefied natural gas (LNG) is also not available in Cambodia at present. Origin
of LNG may be Malaysia, Indonesia and Brunei. Receiving and supply facilities
for LNG consist of unloading jetty, storage reservoir, BOG compressors, vapor-
izer, transfer piping system, etc. Capacity of storage reservoir is approximately
40,000 m3 for 180 MW power plant. Construction cost of these facilities will be
approximately 130 to 170 Million US$, which is almost compatible to the power
plant cost.
Fuel price of LNG is generally higher than that of natural gas. Therefore LNG is
not suitable for this project.

(4) Coal

Possibility of coal utilization is low judging for this project from the economic
point of view, i.e. small scale of power plant, wholly importing of coal, etc.
Cambodia has a indication of existence of coal deposit, but now it is not yet de-
veloped. Therefore, Cambodia has to import coal wholly if coal is used for
power plant. Furthermore, there is no coal unloading facilities in Cambodia, so
that it is necessary to construct a new coal unloading facility in the power station.
The total capacity of new power station will be 270 MW when the 3-stage devel-
opment is completed. Therefore, it might be necessary to construct jetty, un-
loading facility and coal storage facility to meet the requirement of this 270 MW
ultimate capacity. That may results in excessive initial investment, i.e. additional
cost is more than 130 Million US$. The cost of power plant itself is also signifi-
cantly higher than that of gas turbine combined cycle.

(5) Conclusion

In conclusion, only diesel oil and heavy fuel oil could be used as fuels for the
new power station at present in Cambodia, and natural gas will be available in
near future.

3 - 15
3.1.2. Fuel Prices

(1) Heavy Fuel Oil and Diesel Oil

Electricite du Cambodge (EDC) procures fuel oils from selected company

through periodic competitive bidding by several oil companies such as Sokimex,
CALTEX, SHELL, TOTAL, CUPL, etc. At present, the contract covers 2 years
for heavy fuel oil and 3 months for diesel oil.

Contracted fuel price is composed of a standard fuel price at Singapore and an oil
company’s handling cost (premium) including transportation cost. The amount of
premium is fixed during the contract period but the standard fuel price at Singa-
pore varies every hour, so that the fuel price at consumer is not constant.
The example of the price of heavy fuel oil is shown in Table 3.1-2.

The import tax, exceptional tax and social funds are added to the above-
mentioned fuel price. Among these taxes, the exceptional tax is applied to only
gasoline and lubricants. And the social funds are applied to gasoline, diesel oil
and heavy fuel oil.

The import tax rate of diesel oil is 20% and that of heavy fuel oil is 7%. VAT of
10% is applied to all kinds of fuels. Refer to Table 3.1-3.

Base fuel price used for calculation of taxes is not an actual fuel price but a fixed
standard price decided by the custom office. However, if an actual fuel price ex-
ceeds the standard fuel price, the actual fuel price is used for calculation of taxes.

New projects will be exempted from taxes only in the first year of operation.

Fig.3.1-5 shows the trend of heavy fuel oil and diesel oil prices for the last five
years, from Nov. 1996 to Aug. 2001. The average prices of diesel oil and heavy
fuel oil during the last five years, which are of CIF at Phnom Penh and excluding
tax and duties, were 154 and 237 $/ton, respectively.

3 - 16
 Table 3.1.-2 Example of Heavy Fuel Oil Price
(Unit : $/MT)
Singapore Market Price
Date Average
Low High
30th Nov., 1999 138.75 139.75 139.250

01st Dec., 1999 137.50 138.50 138.000

02nd Dec., 1999 139.00 139.25 139.125

03rd Dec., 1999 141.00 141.50 141.250

06th Dec., 1999 142.25 143.00 142.625

Average 140.050

Premium 41.000

Price (CIF at Station) 181.050

Table 3.1-3 Taxes for Fuels

Exceptional
Custom Import Tax Social VAT Grand Total
Tax Sub
Kind of Fuel Cost Funds *1
Amount Amount Total Amount Amount
($) % % ($) % %
($) ($) ($) ($)
Gasoline 320 50 160.00 20 96.00 1.10 257.10 10 57.71 314.81 98.4

Diesel Oil 275 20 55.00 - 0.94 55.94 10 33.09 89.03 32.4

Heavy Fuel Oil 129 7 9.03 - 0.81 9.84 10 13.88 23.72 18.4

Gas 325 7 22.75 - 22.75 10 34.78 57.53 17.7

Lubricant 160 20 32.00 20 38.40 70.40 10 23.04 93.44 58.4

Note; *1 : 3 Riel/1

3 - 17
 CIF Phnom Penh
1996 1997 1998 1999 2000 2001
FuelType Ave
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
Heavy Fuel159 158 163 165 163 142 142 142 142 141 142 148 154 147 144 117 103 103 103 103 109 110 105 110 131 126 109 116 106 105 116 129 128 135 152 164 178 181 182 179 184 208 200 202 213 198 183 206 218 216 190 165 180 180 186 193 184 171 154

Diesel Oil 240 274 291 291 253 255 255 255 255 210 210 217 224 224 208 187 180 176 176 176 165 167 155 168 165 161 150 176 160 160 171 176 174 187 187 216 219 231 230 238 253 306 314 314 300 300 300 342 342 342 315 308 298 314 330 322 320 237

Note: The above fuel prices exclude tax and duties.

CIF Phnom Penh

400
Heavy Fuel Oil Diesel Oil
350

300

250

3 - 18
200

150

100

Fuel Price (US$/ton)

50

Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

1996 1997 1998 1999 2000 2001

Source: Information from EDC

Fig. 3.1-5 Fuel Price in Phnom Penh (CIF) Purchased from CUPL
(2) Natural Gas

Natural gas is not used in Cambodia, so there is no price at present. Natural gas
price at site consists of wellhead price and submerged pipe cost. Wellhead gas
prices are less than 2.2 $/MMBTU at Erawan gas filed which is the biggest gas
filed of Unocal who is the biggest gas supplier in the Gulf of Thailand (i.e., Uno-
cal supplies about 1,000 MMCFD out of 1,800 MMCFD of total consumption of
Thailand) and about 2.5 $/MMBTU on an average in the Gulf of Thailand. The
reason of cheaper price at Erawan would be the effect of more than 1,000 wells
drilling. The price of Yadana gas from Myanmar is 2.5 $/ MMBTU at Thai bor-
der and in southern Vietnam about 2.5 ~ 3.0 $/MMBTU.
In case of development in Cambodian gas fields, as each reservoir capacity is
smaller than that of other countries, well drilling cost might run up. Therefore
wellhead price is estimated around 2.5 ~ 3.0 $/MMBTU.

Gas pipeline cost from the fields to Sihanoukville is estimated about 140 Million
US$ by CNPA and Woodside Co. for 24” pipe diameter and 170 km length. This
cost can be considered as reasonable considering adjusted value of 158 Million
US$ from actual value for 24” pipe and 120 km length in Thailand.
Using this estimation, pipe cost for 12 inch which is suitable size for 270 MW is
calculated about 90 Million US$. This cost is equivalent to 1.0 ~ 1.5 $/MMBTU
depending on the operation load in case of discount rate of 15% and payback
period of 20 years.

Therefore, natural gas price at power plant site would be around 3.5 ~ 4.5 $/
MMBTU as a criterion depending on depreciation period and well drilling cost,
etc.

3 - 19
3.1.3. Typical Analysis of Fuels

Tables 3.1-4 and 3.1-5 show the typical specification of diesel oil and heavy fuel oil,
respectively.
Tables 3.1-6 and 3.1-7 show the analyses of samples from diesel oil and heavy fuel oil,
respectively. These data were submitted by Sokimex. According to the result, sulfur
content is 0.03%, which is incredibly low compared to the specified maximum value
of 0.25%.

In general, analysis of fuel is carried out by each tank car. However, at present So-
kimex Oil Terminal has no analyzing devices, therefore, analysis of fuel is carried out
at his laboratory in Phnom Penh.

Table 3.1-8 shows standard specification for Singaporean oil which shows higher
sulfur content.

New environmental law was drafted in 2000 and authorized without any amendment
in 2001. Sub-decree on air and noise pollution control limits sulfur and lead content
in its Chapter 2, Article 10, Annex 8 (Refer to Table 3.1-9). According to the stan-
dard the permitted sulfur content in diesel oil is 0.2%. Diesel oil imported from
Thailand may pass this new regulation because of their lower sulfur content in the
standard oil, but oil from Vietnam or Singapore shall be analyzed carefully.

Table 3.1-10 shows an example of specification of gas in the Gulf of Thailand.

Properties of gas in the Gulf of Thailand varies in large, i.e., generally less CO2 con-
tent and more oil in the northern area and less oil and more CO2 in the southern area.
Approximately well containing about 70% of CO2 may be discovered in near Indone-
sia. The zone which will be developed by Cambodia may be gas and oil mixing zone
and actual analysis of gas in this area must be observed closely.

3 - 20
 Table 3.1-4 Distillate Fuel Quality Specification

Unit Test Methods Limits

Kinematic Viscosity at 40°C cSt ASTM D445 1.7 - 5.50
Density at 15°C kg/l ASTM D1298 0.820 - 0.870
Gross Calorific Value Btu/lb ASTM D240 19,100
Sulphur wt% ASTM D1266 0.50 max
Ash wt% ASTM D482 0.01 max
Microcarbon Residue % max. ASTM D4530 0.05 max
Sediment by Extraction wt% ASTM D473 0.01 max
Water by Distillation vol% ASTM D95 0.05 max
Flash Point °C ASTM D93 66 min
Pour Point °C ASTM D97 9 max
Cetane Index - ASTM D976 45.5 min
Colour - ASTM D1500 2.0 max
Distillation, 90% recovery °C ASTM D86 370 max
Corrosion, Copper (3h@ 100°C) - ASTM D130 1 max
Strong Acid Number mgKOH/g ASTM D974 nil
Total Acid Number mgKOH/g ASTM D974 0.25 max
(Source : EDC)

Table 3.1-5 Fuel Oil Quality Specification

Unit Test Methods Limits

Kinematic Viscosity at 50°C cSt IP 71 ASTM D445 180 max
Flash Point (PMCC) °C IP 34 ASTM D93 66 min
Relative Density at 15.6/15.6°C kg/l IP 160 ASTM D1298 0.95 max
Pour Point °C IP 15 ASTM D97 21 max
Sulphur wt% IP 61 ASTM D1266 3.5 max.
3.0 annual average
Vanadium mg/kg IP 285T ASTM D1548 95 max
Sodium mg/kg IP 288T ASTM D1318 50 max
Carbon Residue (Conradson) wt% IP 13 ASTM D189 13.0 max
Sediment by Extraction wt% IP 53 ASTM D473 0.10 max
Ash wt% IP 4 ASTM D482 0.10 max
Water by Distillation vol% IP 74 ASTM D95 0.50 max
Gross Calorific Value Btu/lb IP 12 ASTM D240 18,500 min
Asphaltenes wt% IP 143/84 5 max
Aluminium & Silicon mg/kg IP 377 ASTM D5484 60 max
(Source : EDC)

3 - 21
 Table 3.1-6 Analysis Data of High Speed Diesel Fuel

Tested by Alliance Refining Company Limited

Property Units Test Method Specified Value Result

Appearance - Visual Pass Pass

Ash wt% ASTM D482 0.01 max <0.001 *1

Carbon Residue on 10% Distillation
wt% ASTM D4530 0.05 max 0 *1
Residue, Micro Method
Calculated Cetane Index or Cetane ASTM D976 or
- 47 min 56.49
Number ASTM D613
Color, ASTM - ASTM D1500 2.0 max 0.5
Corrosion, Copper Strip 3 hr. at
- ASTM D130 1 max 1a
50°C
Density at 15°C g/ml ASTM D4052 0.810 - 0.870 0.8297
Distillation : °C ASTM D86
10% Recovered 217.8
50% Recovered 278.5
90% Recovered 357 max 350.1
95% Recovered 366.5
Flash Point °C ASTM D93 66 min 73.5

Pour Point °C ASTM D97 9 max -9

Sulfur Content wt% IP336 0.25 max 0.03

Viscosity, Kinematic at 40℃ cSt ASTM D445 1.8 - 4.1 3.196

Water & Sediment vol% ASTM D2709 0.05 max 0.005

(Source : Sokimex)

Sampling Date : 19 Feb., 2000

*1 This test is performed on a 6-monthly basis. The result was obtained from sample dated 03 Dec., 1999.

3 - 22
 Table 3.1-7 Analysis Data of Fuel Oil No.2

Tested by Alliance Refining Company Limited

Property Units Test Method Specified Value Result

Ash wt% ASTM D482 0.1 max 0.018 *1

Density at 15°C g/ml ASTM D4052 0.990 max 0.9361

Flash Point °C ASTM D93 60 min 62.5

Heat of Combustion, Gross kcal/kg ASTM D4868 9,900 min 10,407

Pour Point °C ASTM D97
- Summer(1 March - 31 October) 24 max
- Winter (1 November - 28 February) 18 max -9 *2
Sodium plus Vanadium mg/kg IP 288 200 max 23.2

Sulfur Content wt% ASTM D4294 2.0 max 1.75

Viscosity, Kinematic at 50℃ cSt ASTM D445 90 - 180 168.9

Water & Sediment vol% ASTM D1796 1.0 max 0.10

(Source : Sokimex)

Sampling Date : 25 Dec., 1999

*1 This test is performed on a 6-monthly basis. The result was obtained from sample dated 09 July, 1999.
*2 This test is performed on a monthly basis. The result was obtained from sample dated 01 Dec., 1999.

3 - 23
 Table 3.1-8 Standard Specification for Singapore Oil

Diesel Oil
No. Test Definition Method ASTM Range Type
1 Appearance Visual -
2 Color ASTM D-1500 Max. 1.5
3 Density at 15°C D-1298 Max. 0.8500
4 Copper Corrosion (3h, 50°C) D-130 Max. No.1
5 Distillation D-86
- I.B.P, °C Min. 150
Max. 170
- 10%, °C Max. 230
- 50%, °C Max. 300
- 90%, °C Max. 365
6 Flash Point D-93 Min. 60
7 Pour Point, °C D-97 Max. +10
8 Ash Content, %WT D-482 Max. 0.01
9 Water Andsediment, 5 vol. D-1796 Max. 0.05
10 Sulfur Content, %WT D-1216 Max. 0.70
11 Cetane Inde D-976 Min. 45
12 Water by Distillation D-95 Max. 0.50
13 Acid Number, mgKOH/g D-664 Max. 0.25
14 Carbon Residue, %WT D-189 Max. 0.05
Max. 1.4
15 Kinematic Viscosity at 40°C, cst D-445
Min. 5.0
(Source : EDC)

Heavy Fuel Oil

No. Test Definition Method ASTM Range Type
1 Density at 15°C D-198 Max. 0.985
2 Flash Point, °C D-93 Min. 60
3 Pour Point, °C D-97 Max. 15
4 Sulfur Content, %WT D-1266 Max. 3.5
5 Ash, %WT D-482 Max. 0.1
6 Sediment by Extraction % vol. D-96 Max. 0.25
7 Water by Distillation, % vol. D-95 Max. 1.0
8 Kinematic Viscosity at 40°C, cst D-445 Max. 170
9 Carbon Residue, %WT D-189 Max. 8.0
(Source : EDC)

3 - 24
 Table 3.1-9 Sulfur and Lead Standard permitted to Fuel and
Other Combustion Substances

No. Combustion Substance Sulfur (S) Lead (Pb)

1 Dark fuel 1.0%
2 Diesel 0.2%
3 Petrol - 0.15 g/l
4 Coal 1.5%
Remark : This standard applied to control concentrations of sulfur, lead,
Benzene and hydrocarbons contains in fuel and coals.
(Source : Cambodian Environmental Law)

Table 3.1-10 Properties of Typical Natural Gas

Components Unit
CO2 vol. % 1.65
N2 vol. % 1.92
CH4 vol. % 95.49
C2H6 vol. % 0.72
C3H8 vol. % 0.07
C4H10 vol. % 0.02
C5H12 vol. % 0.10
High Heating Value kJ/Nm3 38,700
Low Heating Value kJ/Nm3 34,920

3 - 25
3.2. Candidate Power Plant Types

Power plant types widely used for utility power stations in the world are as follows:
• Gas Turbine Combined Cycle (GTCC) Power Plant
• Diesel Power Plant
• Conventional Power Plant (boiler/steam turbine system)
• Open-cycle gas turbine power plant

Conventional power plant is the most popular because it can use many kinds of fuel
such as coal, oil and natural gas. GTCC has high thermal efficiency and is used in the
area where clean fuels such as natural gas and diesel oil are available. Diesel generator
is widely used for scattered power sources. Open-cycle gas turbine is mainly used as
standby source for peak load due to its low thermal efficiency.

In this study, three kinds of plant type (GTCC, diesel power plant and conventional
power plant) except open-cycle gas turbine are compared for Sihanoukville Power
Plant which are planned to be operated as base-load power station.

3.2.1. Gas Turbine Combined Cycle Power Plant

Main equipment of GTCC are gas turbine, heat recovery steam generator (HRSG),
steam turbine, and generator. Fig.3.2-1 shows system diagram of GTCC. Fuel is
burnt in combustor of gas turbine, combustion gas rotates the turbine rotor, that turns
the generator. This is the first stage of generation. Then, exhaust gas flows into
HRSG and heats the boiler water in the heat exchanger tubes of HRSG. The boiler
water is converted to the steam, which is induced into steam turbine and rotates the
steam turbine generator. This is the second stage of generation.

3 - 26
 From
No.3
HRSG
From
No.2
H.P. Steam HRSG

From
No.3 HP Turbine Bypass
HRSG
From
No.2
L.P. Steam HRSG

Note :
LP Turbine Bypass
shows the steam line.
shows the water line.

3 - 27
Steam Turbine G
No.1
Deaerator

No.1 HRSG
Condenser

Seawater

LP BFP
Fuel C.P.
(Natural Gas/Diesel Oil)
To
HP BFP No.2
HRSG Condensate
&
G Boiler Feed Water Deaerator

To
No.3
No.1 Gas Turbine HRSG
&
Deaerator

Air Note: This diagram is an example of multi-shaft type.

Fig.3.2-1 System Diagram of Gas Turbine Combined Cycle Power Plant

3.2.2. Diesel Power Plant

Diesel power plant consists of diesel engine and generator. Diesel engine is used for
prime mover for automobile, ship, and electric generator. Fig.3.2-2 shows the system
diagram of diesel power plant. There are three types of diesel engine, i.e. high-speed,
middle-speed and low-speed. High speed diesel generator is excluded from this study
because of its very small capacity. As for rotation speed, revolution of middle speed
diesel engine is around 400 ~ 700 r.p.m. and that of low speed diesel is around 150
r.p.m. Low speed diesel engine has higher thermal efficiency but it is more expensive.
In Cambodia, middle speed diesel is usually used.

Diesel engine is not suitable for large-scale power station because of its small capac-
ity per unit. If it is applied to large-scale power station, so many units need be in-
stalled and that cannot enjoy a scale merit. Maximum unit capacity of middle speed
diesel is less than about 20 MW and the maximum unit capacity of low speed diesel is
about 50 MW.

3.2.3. Conventional Power Plant

Main equipment of conventional power plant are boiler, steam turbine, and generator.
Fig.3.2-3 shows system diagram of conventional power plant. Fuel is burnt in boiler
using burner, and heats the boiler water in the heat exchanger tubes of boiler. The
boiler water is converted to the steam, which is induced into steam turbine and rotates
the steam turbine generator.

3 - 28
 Fuel (Heavy Fuel Oil)
Air
Stack

3 - 29
Diesel
Engine G
De-NOx De-SOx

Fig.3.2-2 System Diagram of Diesel Power Plant

 Main Steam

Stack Steam Turbine

Boiler
Fuel (Heavy Fuel Oil) G

Air
De-SOx

3 - 30
Condenser

Seawater

H.P. Heaters Deaerator L.P. Heaters C.P.

B.F.P.

Fig.3.2-3 System Diagram of Conventional Power Plant

3.3. Technical and Environmental Comparison of Power Plant Types

3.3.1. Technical Comparison

Table 3.3-1 shows technical comparison of each power plant type. Details are de-
scribed as follows:

• Construction Cost

Construction cost of GTCC is cheapest among these 4 candidates. Middle speed

diesel and conventional power plant are relatively cheap, but low speed diesel is
most expensive.

• Applicable Fuel

In rare case, heavy fuel oil is used for gas turbine but it is not recommendable be-
cause of some difficulties mentioned below:

- Complicated pre-treatment of fuel oil is needed.

- Continuous operation is interrupted by high temperature corrosion of turbine
blades and plugging of cooling air hole in turbine blade.

Therefore natural gas as main fuel and diesel oil as standby fuel are applied to
GTCC. Diesel generator and conventional power plant can use both heavy fuel oil
and diesel oil, but heavy fuel oil is usually used from economical point of view
even if environmental mitigation cost is considered.

• Thermal Efficiency of Generation

GTCC and low speed diesel have the highest efficiency of about 50% at LHV
(Low Heating Value) base among 4 candidates. Middle speed diesel has the sec-
ond high efficiency of about 43% (LHV), conventional power plant has the lowest
efficiency of about 39% (LHV).

• Auxiliary Power Consumption Ratio

GTCC, middle speed and low speed diesels are low because they have less auxili-
ary apparatuses. Conventional power plant is almost 2 times higher than GTCC.

3 - 31
• Environmental Mitigation Measures

As for prevention of air pollution, maximum emission levels for pollutant matters
are prescribed by Draft Sub-Decree on Control of Air Pollution and Noise in Cam-
bodia. This standard is applied as temporary emission standard of this study.
Standard O2 concentration in the exhaust gas and conditions for gas volume are not
prescribed by Draft Sub-Decree, so we tentatively use actual O2 concentration and
gas volume at 760 mm Hg, 0°C for the calculation of air pollution. Table 3.3-2
shows comparison of Cambodian standard and estimated emission level of air
pollutant from each type of plant under the conditions described above. As for air
pollution, GTCC needs no environmental mitigation measure because emission
level of NOx, SOx, and particulates are less than emission standard. Other types
of plant need some measures to reduce air pollutant because emission level of air
pollutants exceed the standard except NOx level in conventional power plant.

As for hot water discharge, middle and low speed diesel need no cooling seawater
so they need no measure. GTCC and conventional power plant need measures to
reduce influence of hot water discharge. GTCC uses less quantity of seawater than
conventional power plant, so it needs less expensive cost.

• Ease of Operation

Diesel power plant seems easy to operate. GTCC and conventional power plant
are relatively easy to operate except star-up and shut-down operation because, in
normal operation, they are operated with sophisticated automation system.

• Reliability

GTCC, diesel power plant, and conventional power plant are widely used in the
world, all of them show good reliability. Diesel power plant probably has higher
reliability because it consists of simple equipment.

As for maintenance of gas turbine, engineers in Cambodia has to acquire new

technical knowledge of gas turbine because they have no experience of operation
and maintenance on gas turbine. However gas turbine usually does not need so
frequent maintenance as diesel engine. Diesel power plant may have fewer prob-
lems in maintenance for Cambodian operator because many diesel generators are

3 - 32
 used in Cambodia at present, but it may needs more frequent maintenance and
higher expense.

• Total Evaluation in Technical and Construction Cost Aspects

As shown in Table 3.3-1, GTCC is superior to other candidates at the points of plant
performance and construction cost. The second is middle speed diesel. Convention-
al power plant has no advantage compared to others. However, the final decision of
plant type should be made after considering environmental and economic compari-
sons.

3 - 33
 Table 3.3-1 Comparison of Type of Power Plant

Gas Turbine Diesel Diesel Conventional

Item
Combined Cycle (Middle Speed) (Low Speed) (Oil-fired Thermal)

Construction Cost 870US$/kW 1,370US$/kW 2,020US$/kW 1,340US$/kW

Fuel Natural Gas Heavy Fuel Oil Heavy Fuel Oil Heavy Fuel Oil

Efficiency ( LHV ) Approx. 50% Approx. 43% Approx. 49% Approx. 39%

Auxiliary Power

3 - 34
Approx. 2.8% Approx. 4.6% Approx. 4.6% Approx. 6.7%
Consumption Ratio

Environmental Air Pollution not necessary necessary necessary necessary

Mitigating
Measures Hot Water
necessary not necessary not necessary necessary
Discharge

Ease of Operation Good Better Better Good

Reliability Good Better Better Good

LHV : Low Heating Value

 Table 3.3-2 Emission Levels in Each Power Plant

Cambodian Gas Turbine Diesel Generator Diesel Generator Conventional

Item
Standard Combined Cycle (Middle Speed) (Low Speed) Power Plant

1,000 mg/m3
NOx < 150 ppm < 1,500 ppm < 1,500 ppm < 300 ppm
(487 ppm)

500 mg/m3
SOx - < 700 ppm < 700 ppm < 2,200 ppm
(175 ppm)

3 - 35
Particulate 100 mg/m3 < 5 mg/m3 < 250 mg/m3 < 250 mg/m3 < 200 mg/m3

Note : Cambodian standard is based on the sub-decree on Control of Air Pollution and Noise.
The maximum concentration of sulfur for diesel oil and heavy fuel oil is 0.2 % and 3.5 % respectively.
Emission levels for Gas Tribune Combined Cycle are based on natural gas, because diesel oil is used as
back-up fuel.
Above concentrations are based on 760 mmHg, 0°C condition, and the emission levels of NOx and
Particulates are referred to typical maximum level given by main manufacturers.
3.3.2. Environmental Comparison

Table 3.3-3 shows annual expected quantities of air pollutant discharged from each 180
MW power plant. Table 3.3-4 shows calculation of discharge quantity. Table 3.3-5 and
Table 3.3-6 show composition of fuels used for calculation. Data of composition of die-
sel oil, heavy fuel oil and natural gas in Cambodia which we have obtained are very lim-
ited, so general data is used for calculation.

Emission level of NOx, SOx from diesel power plant and NOx from conventional
power plant surpass Cambodian draft standard, so De-NOx and De-SOx systems are
supposed to be installed to those power plant to reduce emission level less than Cambo-
dian draft standard (NO2 < 1,000 mg/Nm3 (487 ppm), SO2 < 500 mg/Nm3 (175 ppm)).
Quantity of air pollutant discharged from each power plant is calculated using con-
centration of NOx and SOx after De-NOx and De-SOx system.

Table 3.3-3 Quantity of Air Pollutant Discharged from Each Power Plant

NOx as NO2 SOx as SO2 CO2

ton/year ton/year ton/year
GTCC 928 0 343,000
Diesel (Middle Speed) 3,766 *1 1,353 *2 527,000
Diesel (Low Speed) 3,335 *1 1,198 *2 466,000
Oil-fired Conventional 868 506 *2 596,000
*1 : after DeNOx system *2 : after DeSOx system

GTCC is superior to diesel power plant at the comparison of environmental aspect as

same as technical comparison. In GTCC, emission level of NOx is low because of
low concentration of NOx at combustion and SOx is not produced because of no sul-
fur in natural gas.

As for emission of CO2, GTCC is the lowest among 4 candidates. GTCC consumes
less fuel for generation compared to others because of high efficiency.

Compared to diesel power plant using heavy fuel oil, GTCC using natural gas can re-
duce emission of air pollutant. CO2 is also reduced, that will contribute to preventing
greenhouse effect in the earth.

3 - 36
 Table 3.3-4 Calculation of Air Pollutant Discharged from Each Power Plant

Quantity of Exhaust Gas a b c d e e=a×b×c×d

Sending-Out Energy Heat Rate Unit Gas Volume Specific Gravity Quantity of Gas
3 6 3
GWh/year kcal/kWh Nm /10 kcal kg/Nm ton/year
GTCC 827 1,772 3,240.74 1.302 6.183E+06
Diesel (middle speed) 827 2,084 3,425.56 1.310 7.734E+06
Diesel (low speed) 827 1,845 3,425.56 1.310 6.847E+06
Oil-fired Conventional 827 2,358 1,091.01 1.360 2.893E+06
-6
Emission of NOx f g g = e × f × 10
Concentration of NOx Quantity of NO2
PPM ton/year
GTCC 150 928
*
Diesel (middle speed) 487 3,766
*
Diesel (low speed) 487 3,335
Oil-fired Conventional 300 868
* : after DeNOx system
-6
Emission of SOx h I I = e × h × 10

3 - 37
Concentration of SOx Quantity of SO2
PPM ton/year
GTCC 0 0
*
Diesel (middle speed) 175 1,353
*
Diesel (low speed) 175 1,198
*
Oil-fired Conventional 175 506
* : after DeSOx system

Emission of CO2 ｊ ｋ -6
k = e × j × 10
Concentration of CO2 Quantity of CO2
Vol.% ton/year
GTCC 5.55 3.432E+05
Diesel (middle speed) 6.81 5.267E+05
Diesel (low speed) 6.81 4.663E+05
Oil-fired Conventional 20.61 5.963E+05
 Table 3.3-5 Composition of Fuel Oil

(Unit : wt.%)
Components Diesel Oil Heavy Fuel Oil

Carbon 86.22 85.70

Hydrogen 13.10 10.30

Oxigen 0.10 0.10

Nitrogen 0.08 0.30

Sulfur 0.20 3.50

Water & Sediment 0.00 0.10

Ash 0.00 0.00

Table 3.3-6 Composition of Typical Natural Gas

(Unit : vol.%)
Components Natural Gas
CO2 1.65
N2 1.92
CH4 95.49
C2H6 0.72
C3H8 0.07
C4H10 0.02
C5H12 0.10

3 - 38
3.4. Economic Comparison

3.4.1. Purpose

The purpose of the economic comparison is to study the most economic power plant
type among the alternative candidates that will be introduced to Cambodia. The
economic justification for the implementation of a power plant is also carried out in
Chapter 10.

3.4.2. Methodology for Comparison

The following economic indicators are used for the economic comparison.
(1) Net Present Value of Total Cost (NPV)
(2) Levelised Production Cost at Sending-out (LPC)

All alternative candidates are assumed to be the same kWh and kW values at the
sending-out (at powerhouse exit).

(1) Net Present Value of Total Cost

The net present value of the total cost, consisting of construction cost, mainte-
nance & operation cost during the service period, is derived from the conversion
to the present value with a discount rate. A power plant type with the lowest net
present value (least cost) against the same benefit is regarded as an economic
type. The net present value is derived from the following formula and converted
to the year of commencement of plant operation.

n
Cost( i )
NPV = ∑
i = −1 ( 1 + r )
i

Where i : years
n : Construction period + Service period (= 2 years + 20 years)
r : Discount rate (= 10%)1
Cost (i) : Cost in year i

1
A Discount rate of 10 % ~ 12 % is well applied to Power Sectors in South-east Asia. A discount rate of 10 % is used here.

3 - 39
 (2) Levelised Production Cost at Sending-out

Calculation of the production cost follows the calculation method of International

Energy Agency, which is called the levelised production cost. A power plant
type with the lowest production cost is regarded as an economic type. The level-
ised production cost is derived from the following formula.

Levelised Production Cost =

∑ NPV(Cost)
∑ NPV(Production Energy)
Where, ΣNPV (Cost) : Accumulation of net present value of the cost
(construction & operation) converted with a
discount rate.

ΣNPV (Production Energy) : Accumulation of net present value of produc-

tion energy at sending-out converted with a
discount rate.

The levelised production cost calculated in this section is used as one of the indi-
ces to make the economic priorities among the candidates. Financial levelised
production cost is also calculated in Chapter 10.

3.4.3. Types of Power Plants

Four (4) power plant types as mentioned in the preceding sections are used in the
economic comparison.
(1) GTCC Power Plant
(2) Diesel Power Plant (middle speed)
(3) Diesel Power Plant (low speed)
(4) Conventional Power Plant

Unit construction cost, maintenance & operation cost, fuel type, fuel cost, rate of sta-
tion use, forced outage rate and scheduled maintenance days are shown in Table 3.4-1.
The construction cost concerning the diesel power plant and conventional power plant
includes the equipment cost related to reducing the air pollution because heavy fuel
will be used.

3 - 40
3.4.4. Prices in Economic Comparison

The economic prices are used in the economic comparison because the evaluation of
the project is carried out from the viewpoint of the national economy. The market
prices are determined with the relationship between demands and supply ideally.
However, provided that the market prices are distorted by the government’s interfer-
ences with the market, the market prices removed the above distortion are called as
the economic prices (shadow prices). Tax, duty and subsidy are one of the examples2
of the government’s interferences. In the economic comparison, tax and subsidy are
excluded and the following prices are applied concretely.

(1) Unit Construction Cost of Power Plant

The unit construction cost expressed in US$ term is used as the border price.

(2) Fuel Prices

The fuel prices of CIF (Cost, insurance and freight) are used except natural gas
because the all oil fuels in Cambodia are imported from overseas. Averaged CIF
fuel prices for the period from 1996 to 2001, as mentioned in Section 3.1.2, are
applied.

Concerning the natural gas, which is expected to be explored in Cambodia in fu-

ture, 4.0 $/MMBTU (L.H.V. base) at power plant site including the markup is as-
sumed.

(3) Other Operation & Maintenance Cost

Other operation and maintenance costs estimated in US$ term are used as the
border prices at the moment.

2
An exchange rate controlled by a government is also one of the examples.

3 - 41
3.4.5. Annual Capacity Factor

Annual capacity factors are referred to the results of optimum power development
program in Section 2.2.
From the year 7th (2012) onwards, the annual capacity factors are set at 50 % based
on the estimated capacity factors from the 7th year (2012) to 13th year (2018).

3.4.6. Results of Economic Comparison

The results of economic comparison for the four (4) power plant types are summa-
rized in Table 3.4-4. The relative calculation sheets are demonstrated in Table 3.4-2
to Table 3.4-3 and Fig.3.4-1 shows the breakdown of production cost.

Table 3.4-4 Net Present Value and Levelised Production Cost

Natural Gas Diesel Diesel Oil-fired

Type
Combined Cycle (Middle Speed) (Low Speed) Conventional
Fuel 4.0 $/MMBTU 3.99 $/MMBTU 3.99 $/MMBTU 3.99 $/MMBTU
Price ( - $/ton) (154 $/ton) (154 $/ton) (154 $/ton)
NPV 412.1 M.$ 591.4 M.$ 694.8 M.$ 601.2 M.$
LPC 5.52 ¢/kWh 7.92 ¢/kWh 9.30 ¢/kWh 8.05 ¢/kWh
Fuel NG HFO HFO HFO

A combined cycle power plant presents the lowest net present value of total cost and
accounts for 70%, 59%, and 69% of middle speed diesel, low speed diesel and oil-
fired conventional respectively.

Concerning the levelised production cost at sending-out level, natural gas-fired com-
bined cycle power plant is proven to be far least among the alternative candidates.

According to the above results, combined cycle power plant is the most economic
power plant.

3 - 42
 Table 3.4-1 Characteristics of Candidates of Power Plants and Fuel Cost

Unit Installed Construction Disbursement Station Fixed Variable

SMD FOR Plant Life Fuel
Name of Plant Capacity Cost Period Schedule Use O/M Cost O/M Cost
Type
MW US$/kW Years 1st year 2nd year days/year % % Years $/kW-year $/MWh
Combined Cycle 90 870 2 40% 60% 49 8 2.8 20 20 1.0 NG
Diesel (Middle Speed) 90 1,370 2 50% 50% 28 20 4.6 20 21 3.0 HFO
Diesel (Low Speed) 90 2,020 2 50% 50% 28 20 4.6 20 21 3.0 HFO
Oil-fired Conventional 100 1,340 2 40% 60% 53 8 6.7 20 20 3.6 HFO
Note: SMD =Scheduled Maintenance Days, FOR=Forced Outage Rate, NG = Natural Gas, HFO=Heavy Fuel Oil

Installed costs of Diesel and Oil-fired Conventional include the mitigation equipment costs against the air pollution.

3 - 43
Fuel Price* Efficiency Fuel Cost
Plant Type Fule Type
US$/MMBTU BTU/kWh US$/MWh
Combined Cycle NG 4.00 6,829 27.32
Diesel (Middle Speed) HFO 3.99 7,888 31.49
Diesel (Low Speed) HFO 3.99 6,987 27.89
Oil-fired Conventional HFO 3.99 8,729 34.85
Note: *Fuel Price based on L.H.V. (Low Heating Value)
 Table 3.4-2 Calculation for Equivalent Installed Capacity and Generation Energy
Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
Capacity Factor 71% 75% 55% 63% 67% 70% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50%

Stage1 90 MW
Stage 2 90 MW

1 Combined Cycle (Natural Gas-fired)

Installed Capacity (90 MW x 2 stages) 180 MW
Scheduled Maintenance Days 49 days
Forced Outage Rate 8.0%
Station Use 2.8%
Generation Energy GWh 559.8 591.3 867.2 993.4 1056 1104 788.4 788.4 788.4 788.4 788.4 788.4 788.4 788.4 788.4 788.4 788.4 788.4 788.4 788.4 394.2 394.2
Sending-out Energy GWh 544.1 574.7 842.9 965.6 1027 1073 766.3 766.3 766.3 766.3 766.3 766.3 766.3 766.3 766.3 766.3 766.3 766.3 766.3 766.3 383.2 383.2

2 Diesel (Middle Speed)

Scheduled Maintenance Days 28 days

3 - 44
Forced Outage Rate 20.0%
Station Use 4.6%
kW Adjustment Factor 1.099
kWh Adjustment Factor 1.019
Equivalent Installed Capacity 197.8
Equivalent Generation Energy GWh 570.4 602.5 883.7 1012 1077 1125 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 401.7 401.7

3 Diesel (Low Speed)

Scheduled Maintenance Days 28 days
Forced Outage Rate 20.0%
Station Use 4.6%
kW Adjustment Factor 1.099
kWh Adjustment Factor 1.019
Equivalent Installed Capacity 197.8
Equivqlent Generation Energy GWh 570.4 602.5 883.7 1012 1077 1125 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 401.7 401.7

4 Oil-fired Conventional
Scheduled Maintenance Days 53 days
Forced Outage Rate 8.0%
Station Use 6.7%
kW Adjustment Factor 1.055
kWh Adjustment Factor 1.042
Equivalent Installed Capacity 189.9
Equivalent Generation Energy GWh 583.3 616.1 903.6 1035 1101 1150 821.5 821.5 821.5 821.5 821.5 821.5 821.5 821.5 821.5 821.5 821.5 821.5 821.5 821.5 410.8 410.8
 Table 3.4-3 Comparison Among the Power Plant Candidates
Year -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
Sending-out GWh 544.1 574.7 842.9 965.6 1027 1073 766.3 766.3 766.3 766.3 766.3 766.3 766.3 766.3 766.3 766.3 766.3 766.3 766.3 766.3 383.2 383.2
Discount Rate 10.0%
Conversion Factor 1.2100 1.1000 1.0000 0.9091 0.8264 0.7513 0.6830 0.6209 0.5645 0.5132 0.4665 0.4241 0.3855 0.3505 0.3186 0.2897 0.2633 0.2394 0.2176 0.1978 0.1799 0.1635 0.1486 0.1351 Sum
NPV of Sending-out GWh 0.0 0.0 544.1 522.5 696.6 725.5 701.3 666.2 432.6 393.3 357.5 325.0 295.4 268.6 244.1 222.0 201.8 183.5 166.7 151.6 137.9 125.3 56.9 51.8 7470.2

1 Combined Cycle (Natural Gas-fired) Net Present Value of Cost 412.1 M.US$ Levelised Production Cost 5.52 c/kWh
Generation Energy GWh 559.8 591.3 867.2 993.4 1056 1104 788.4 788.4 788.4 788.4 788.4 788.4 788.4 788.4 788.4 788.4 788.4 788.4 788.4 788.4 394.2 394.2 Sum
Construction Cost M.US$ 31.32 46.98 31.32 46.98 156.60
Fixed O/M Cost M.US$ 1.80 1.80 3.60 3.60 3.60 3.60 3.60 3.60 3.60 3.60 3.60 3.60 3.60 3.60 3.60 3.60 3.60 3.60 3.60 3.60 1.80 1.80 72.00
Variable O/M Cost M.US$ 0.56 0.59 0.87 0.99 1.06 1.1 0.79 0.79 0.79 0.79 0.79 0.79 0.79 0.79 0.79 0.79 0.79 0.79 0.79 0.79 0.39 0.39 17.01
Fuel Cost M.US$ 15.29 16.15 23.69 27.14 28.86 30.16 21.54 21.54 21.54 21.54 21.54 21.54 21.54 21.54 21.54 21.54 21.54 21.54 21.54 21.54 10.77 10.77 464.39
Cost Total M.US$ 31.32 46.98 48.97 65.52 28.16 31.73 33.52 34.86 25.93 25.93 25.93 25.93 25.93 25.93 25.93 25.93 25.93 25.93 25.93 25.93 25.93 25.93 12.96 12.96 710.00
NPV as of Year 1 M.US$ 37.9 51.68 48.97 59.56 23.27 23.84 22.89 21.64 14.64 13.31 12.10 11.00 10.00 9.09 8.26 7.51 6.83 6.21 5.64 5.13 4.66 4.24 1.93 1.75 412.05

2 Diesel (Middle Speed) Net Present Value of Cost 591.4 M.US$ Levelised Production Cost 7.92 c/kWh
Generation Energy GWh 570.4 602.5 883.7 1012 1077 1125 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 401.7 401.7 17321.2
Construction Cost M.US$ 67.75 67.75 67.75 67.75 271.0

3 - 45
Fixed O/M Cost M.US$ 2.08 2.08 4.15 4.15 4.15 4.15 4.15 4.15 4.15 4.15 4.15 4.15 4.15 4.15 4.15 4.15 4.15 4.15 4.15 4.15 2.08 2.08 83.0
Variable O/M Cost M.US$ 1.71 1.81 2.65 3.04 3.23 3.37 2.41 2.41 2.41 2.41 2.41 2.41 2.41 2.41 2.41 2.41 2.41 2.41 2.41 2.41 1.21 1.21 52.0
Fuel Cost M.US$ 17.96 18.97 27.83 31.88 33.9 35.42 25.3 25.3 25.3 25.3 25.3 25.3 25.3 25.3 25.3 25.3 25.3 25.3 25.3 25.3 12.65 12.65 545.5
Cost Total M.US$ 67.75 67.75 89.5 90.61 34.63 39.07 41.28 42.94 31.86 31.86 31.86 31.86 31.86 31.86 31.86 31.86 31.86 31.86 31.86 31.86 31.86 31.86 15.94 15.94 951.5
NPV as of Year 1 M.US$ 81.98 74.53 89.50 82.37 28.62 29.35 28.19 26.66 17.98 16.35 14.86 13.51 12.28 11.17 10.15 9.23 8.39 7.63 6.93 6.30 5.73 5.21 2.37 2.15 591.4

3 Diesel (Low Speed) Net Present Value of Cost 694.8 M.US$ Levelised Production Cost 9.3 c/kWh
Generation Energy GWh 570.4 602.5 883.7 1012 1077 1125 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 803.4 401.7 401.7 17321.2
Construction Cost M.US$ 99.89 99.89 99.89 99.89 399.6
Fixed O/M Cost M.US$ 2.08 2.08 4.15 4.15 4.15 4.15 4.15 4.15 4.15 4.15 4.15 4.15 4.15 4.15 4.15 4.15 4.15 4.15 4.15 4.15 2.08 2.08 78.9
Variable O/M Cost M.US$ 1.71 1.81 2.65 3.04 3.23 3.37 2.41 2.41 2.41 2.41 2.41 2.41 2.41 2.41 2.41 2.41 2.41 2.41 2.41 2.41 1.21 1.21 49.6
Fuel Cost M.US$ 15.91 16.8 24.65 28.23 30.02 31.37 22.41 22.41 22.41 22.41 22.41 22.41 22.41 22.41 22.41 22.41 22.41 22.41 22.41 22.41 11.2 11.2 460.7
Cost Total M.US$ 99.89 99.89 119.6 120.6 31.45 35.42 37.4 38.89 28.97 28.97 28.97 28.97 28.97 28.97 28.97 28.97 28.97 28.97 28.97 28.97 28.97 28.97 14.49 14.49 988.7
NPV as of Year 1 M.US$ 120.9 109.88 119.59 109.62 25.99 26.61 25.54 24.15 16.35 14.87 13.51 12.29 11.17 10.15 9.23 8.39 7.63 6.94 6.30 5.73 5.21 4.74 2.15 1.96 694.8

4 Oil-fired Conventional Net Present Value of Cost 601.2 M.US$ Levelised Production Cost 8.05 c/kWh
Generation Energy GWh 583.3 616.1 903.6 1035 1101 1150 821.5 821.5 821.5 821.5 821.5 821.5 821.5 821.5 821.5 821.5 821.5 821.5 821.5 821.5 410.8 410.8
Construction Cost M.US$ 50.89 76.34 50.89 76.34 254.46
Fixed O/M Cost M.US$ 1.90 1.90 3.80 3.80 3.80 3.80 3.80 3.80 3.80 3.80 3.80 3.80 3.80 3.80 3.80 3.80 3.80 3.80 3.80 3.80 1.90 1.90 72.20
Variable O/M Cost M.US$ 2.10 2.22 3.25 3.73 3.96 4.14 2.96 2.96 2.96 2.96 2.96 2.96 2.96 2.96 2.96 2.96 2.96 2.96 2.96 2.96 1.48 1.48 60.84
Fuel Cost M.US$ 20.33 21.47 31.49 36.07 38.36 40.08 28.63 28.63 28.63 28.63 28.63 28.63 28.63 28.63 28.63 28.63 28.63 28.63 28.63 28.63 14.32 14.32 588.62
Cost Total M.US$ 50.89 76.34 75.22 101.93 38.54 43.60 46.12 48.02 35.39 35.39 35.39 35.39 35.39 35.39 35.39 35.39 35.39 35.39 35.39 35.39 35.39 35.39 17.70 17.70 976.12
NPV as of Year 1 M.US$ 61.58 83.97 75.22 92.66 31.85 32.76 31.50 29.82 19.98 18.16 16.51 15.01 13.64 12.40 11.28 10.25 9.32 8.47 7.70 7.00 6.37 5.79 2.63 2.39 601.24
 Fuel : NG HFO HFO HFO
10.0

9.30

8.0 7.92 8.05

3.66

6.0
4.09 4.49
5.52

3 - 46
4.0
3.33

Levelised Production Cost (c/kWh)

5.64

2.0 3.83
3.56

2.19

0.0
Combined Cycle Diesel (Middle Speed) Diesel (Low Speed) Oil-fired Conventional

Capital Cost Operation Cost Type of Power Plants

Fig. 3.4-1 Comparison of Production Cost Components at Plant excluding Taxes imposed on Fuel (10%Discount Rate)
3.5. Conclusion

3.5.1. Technical and Environmental Aspect

Combined cycle power plant is superior to the others in plant performance and envi-
ronmental aspect. Compared to oil-fired middle speed diesel usually used in Cambo-
dia, combined cycle power plant can reduce about 75% of NOx and 100% of SOx,
about 35% of CO2 emission. From environmental point of view, such as prevention
of air pollution and greenhouse effect, it is preferable to select combined cycle power
plant as the plant type of Sihanoukville Power Plant.

As for operation and maintenance, combined cycle power plant is some difficult for
Cambodia to operate or maintain compared to diesel generator because gas turbine
needs new technological knowledge for operation and maintenance but they have no
experience. However, gas turbine and gas turbine combined cycle technologies are
very popular throughout the world. And a gas turbine has been used since 1960’s and
combined cycle is used since 1980’s even in neighboring countries in Southeast Asia
such as Indonesia and Bangladesh. Thus introduction of combined cycle power plant
to developing countries seems to bring no serious technical problem. Also in Cambo-
dia, introduction of combined cycle power plant is possible through appropriate tech-
nical training.

It is expected that electrical demand will further increase and large-scale power plant
will be needed in Cambodia from now on. Introduction of combined cycle power
plant, which is suitable for large-scale power plant, will contribute to the development
of large-scale power source in future Cambodia.

3.5.2. Economic Aspect

A combined cycle power plant has been proved to be the most economic power plant
type in the course of the economic comparative studies, consisting of net present val-
ue of total cost, annual levelised cost under the assumed conditions.

3 - 47
3.5.3. Conclusion of Optimum Type Power Plant

From comparative evaluation in technical and economic and environmental aspects,

gas turbine combined cycle power plant is considered the most suitable for Cambodia.

On the other hand, since EDC has no operation experience concerning the gas turbine
combined cycle including a gas turbine itself, the technical training for EDC staffs
will be required based on the technical training schedule, which will incorporate the
timing of the project implementation.

3 - 48