Vietnam to begin work on $6bn LNG import terminal plan next month

PetroVietnam, the state-owned energy company, has announced plans to begin work on its first LNG import terminal in the south of the country in late October. This will be the beginning of a plan to invest $6bn in the construction of six such facilities over the next few years.

The Thi Vai LNG terminal will be built by Samsung C&T in Ba Ria-Vung Tau province to the east of Ho Chi Minh City. It will be able to import up to 1 million tonnes of gas a year when the first phase of the scheme is completed by the third quarter of 2022. This will then be tripled by 2023.

Vietnam intends to complete another five by 2025, and to bring the total to 10 by 2029. The second terminal is earmarked as Son My LNG, just to the north of Thai Vai. This will also have multiple phases, the first of which would have a capacity of 3.6 million tonnes. PetroVietnam signed a memorandum of understanding with US utility AES Corporation to collaborate on this project during President Trump’s state visit to Vietnam in November 2017.

The move will, it is hoped, help to preempt a looming energy shortage, which the government fears will choke the Vietnamese economy’s 7% growth rate. The Ministry of Industry and Trade told the Reuters agency that "Vietnam’s demand for electricity will exceed its supply by 6.6 billion kWh in 2021, increasing to 15 billion kWh by 2023, equivalent to about 5% of forecasted demand for electricity".

The ministry added that Vietnam would need an average of $6.7bn a year to expand its annual power generation capacity by 10% between 2016 and 2030.

The need to meet this expected shortfall has put a strain on the country’s capital resources.

The Natural Gas Intelligence website quotes an analyst at energy consultancy Wood Mackenzie as saying: "The LNG development plan for Vietnam seems to have taken two directions: the planned route underpinned by LNG projects outlined in the Gas Plan, and the ‘wildcards’ path where private investors seek out viable integrated LNG-to-power projects with the support of local governments.

Natural Gas Intelligence reports that in May, Novatek, Russia’s largest independent gas producer, agreed with Vietnam’s Ninh Thuan Provincial People’s Committee to develop an integrated energy-generating project in the country that will also use LNG.

The project provides for the delivery of LNG using existing ports as well as developing new infrastructure, including the construction of an LNG regasification terminal and new gas-fired power plants in Vietnam.

In March, Virginia-based Gen X Energy, an affiliate of Blackstone Energy Partners, sent representatives to meet Ba Ria-Vung Tau provincial leaders to discuss building a gas-fueled power centre and an LNG storage facility, with an estimated cost of nearly $6bn.

Image: The signing ceremony for the Thi Vai deal was held on 24 June (Samsung C&T)

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