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capacity in order to meet rising demand for nat- And in the short term, Vietnam faces a crunch in
ural gas and lessen their dependence on more both gas and power generation as demand increas-
polluting fuel, such as coal. Indeed, the Institute ingly outstrips supply. Indeed, Rystad has warned
of Energy of Vietnam is in the process of draft- that in the shorter term, the country may be forced
ing a new master power development plan. It has to import more coal in order to meet the shortfall,
compiled a list of 22 potential LNG-to-power thus undermining efforts to reduce greenhouse gas
projects with a combined capacity of up to 108.5 (GHG) emissions.
GW, the first of which is anticipated to enter ser-
vice by 2023. What next
If all of these proposed projects go ahead, they There is considerable interest in both develop-
could nearly double Vietnam’s total installed ing LNG import capacity in Vietnam and in
generation capacity of 56 GW. NewsBase supplying the super-chilled fuel to the country
reported in July that the Vietnamese govern- as the LNG industry works to meet the growing
ment was targeting the construction of at least demand for gas. As of late August, at least eight
10 such projects during the coming decade. And projects had preliminary supply agreements
consultancy Rystad Energy said in late June that signed, with US companies in particular target-
four LNG terminals were already “in the project ing Vietnamese customers.
pipeline” – the Thi Vai LNG, Son My LNG, Tien Recent interest was attributed in part to
Giang LNG and South West LNG facilities – efforts to make it into Vietnam’s National Power
which would have a combined capacity of 10mn Development Plan VIII, which the country’s
tpy by 2025. energy ministry is due to submit to the prime
The consultancy warned, however, that these minister for approval this month. And when the
projects would be slow to address Vietnam’s finalised plan is published, it will likely provide
immediate gas shortages. Indeed, it anticipate more clarity on how the Vietnamese LNG indus-
that Vietnamese LNG import capacity will only try can be expected to evolve over the coming
reach 1mn tpy by 2023, when Phase 1 of the Thi years.
Vai terminal is due to enter service, saying that LNG is set to remain a medium-term option
this would fill the demand-supply gap “only for Vietnam, and possibly a long-term one,
marginally”. depending on the pace of the energy transition
Complicating this is the fact that the corona- in the country, but it will not help with short-
virus (COVID-19) could result in delays to con- term gas and power shortages. The development
struction schedules. This is on top of the fact that of new regasification infrastructure will be rel-
large-scale, multi-billion-dollar projects such as atively slow. But the developers of the projects
new LNG terminals and associated power plants involved will be keen to move as fast as possible
already run a risk of delays given their complexity. once facilities have been sanctioned.™

Week 41 15•October•2020 www. NEWSBASE .com P7