Vietnam and Laos

The Challenge

On behalf of Petroleum Trading Lao Public Company, Laos, a rigorous refined oil product market analysis forecast and economic evaluation of the proposed Vietnam-Laos oil pipeline was required for investment decision. This commercial review was done in parallel with Penspen who conducted an updated technical review and cost estimate of the project. IPA was commissioned to provide this commercial analysis.

Our Solution

IPA, with technical engineering support from Penspen, provided a techno-economic evaluation of the pipeline from the port at Vietnam to central Laos.  The market and economic assessment looked at various demand growth scenarios and competition analysis. IPA contributed:

  • product (diesel and gasoline) market demand forecasts; and
  • pipeline and road truck competition analysis
  • project economic analysis and model.
  • risk assessment

The demand forecasts for gasoline and diesel incorporated relevant regional macroeconomic and socioeconomic indicators, impacting the growth in transportation fuels.  The demand forecast scenarios for Laos were projected up to 2050, as well as the demand potential and threats in neighbouring countries.

The technical review assessed the pipeline size and design, plus its suitability to meet the projected demand forecast scenarios and the potential to capture the overall market. The competitiveness of the different pipeline options was also analysed using a discounted cash flow economic model which considered the market capture profile and project cost estimates.