Unocal said yesterday it had discovered some 2.5 trillion cubic feet of gas in three fields in Vietnam, which would require at least $1.5 billion to bring to shore to drive new power developments.

In a statement, Unocal said the gross unrisked reserve potential, including undrilled prospects in the combined contract areas - Blocks B 52/97 and 48/95 - was estimated at five to eight trillion cubic feet, with more drilling planned.

"Our drilling results show that there are sufficient resources on the blocks to support major new power development projects in Vietnam with clean-burning natural gas," Randy Howard, Unocal vice-president for international energy operations, said.

Vietnam has been one of the hotspots for exploration in Asia in the last few years with Sutu Vang and Sutu Den.

Sutu Den is estimated to hold recoverable reserves of 200 to 400 million barrels of crude oil, one of the largest discoveries in Southeast Asia in the last decade, with Sutu Vang, or Golden Lion, estimated to have potential reserves of up to 100 million barrels of oil equivalent.

Unocal said the gas was in a core area that would allow the fields to be developed in a single programme with shared offshore infrastructure.

John Parmigiano, president of Unocal Vietnam, said the company and state electricity monopoly Electricity of Vietnam would soon begin a prefeasibility study for a power plant to be built at O Mon, in the southern province of Can Tho.

The statement said Petrovietnam and Unocal were also completing an initial study on a 236-mile pipeline from the offshore gas fields to O Mon.

Unocal has production sharing contracts with Petrovietnam covering Blocks B, 48/95 and 52/97 along with Mitsui Oil Exploration Co (Moeco) of Japan and Thailand's PTT Exploration and Production (PTTEP).

It said Petrovietnam Exploration and Production (PEVP) holds working interests in Blocks B and 48/95 and the rights to acquire additional interest in both production sharing contracts.

Conversion of Petrovietnam's option would leave Unocal Vietnam Exploration Ltd with a 42.38 per cent working interest in Blocks B and 48/95 and Unocal's Southwest Vietnam Exploration & Production Ltd with a 43.4 per cent stake in Block 52/97.

It said Moeco would hold 25.62 per cent in Blocks B and 48/95 and 19.6 per cent in Block 52/97. PTTEP would hold 8.5 per cent in Blocks B and 48/95 and seven per cent in Block 52/97.

PVEP, meanwhile, would hold 23.5 per cent in Blocks B and 48/95 and 30 per cent in Block 52/97. Parmigiano told Reuters earlier that total investment would include construction of a $350 million pipeline to feed first one, then eventually three power plants at $400 million each.

The plants would generate a total 1,500 megawatts of electricity, eventually rising to 3,000 megawatts for state monopoly Electricity of Vietnam. He said the gas fields would be developed between 2007 and 2010, depending on construction of the pipeline and power plants.

The complex geology of the fields would require drilling of as many as 400 wells over 25 years to exploit the reservoirs, Parmigiano said.

He said the gas contained a high proportion of carbon dioxide - estimated at 20-30 per cent - which would have to be taken into account when the power plants were built.