Page 10 - GLNG Week 29 2020

GLNG COMMENTARY GLNG

Rockhold said the plan was now awaiting A 3-GW LNG-to-power scheme in Long An
approval from the Vietnamese government, with Province was also flagged as a potential invest-
Chan May LNG hoping to receive an investment ment target for ExxonMobil.
licence this autumn. The super-major would use LNG imported
from the US or elsewhere in its global portfolio.
Bigger push However, Vietnam is coming under pressure
If the facility receives its licence as expected, it from US President Donald Trump to narrow the
will join a small but growing list of projects that trade deficit the US has with the Asian country.
are moving into the construction phase. Con- Thus importing LNG from the US could help
sultancy Rystad Energy listed four LNG import balance trade between the two countries at a
terminals as being “in the project pipeline” as of time when Vietnam could receive a diplomatic
late June, primarily in Southern Vietnam – Thi boost from doing so.
Vai LNG, Son My LNG, Tien Giang LNG and And on the US side, LNG exporters are keen
South West LNG. These terminals will have a to grow their markets, especially given that the
combined capacity of 10mn tonnes per year trade war with China continues to depress trade
(tpy) of LNG by 2025. between those two countries. Indeed, Delta
However, Rystad warned that the combined struck a preliminary 2mn tpy supply deal for its
capacity of the terminals would only reach 1mn Bac Lieu project with the proposed Magnolia The challenge for
tpy by 2023 with the start-up of Phase 1 of the Thi LNG facility in the US last year. However, the
Vai project. Thus in the short term, gas demand Magnolia project recently changed hands, and Vietnam, however,
still threatens to outstrip supply and could lead the new owner, Glenfarne Group, has not com- is that none of
to Vietnam ramping up its coal imports to meet mented on the supply deal.
power generation needs. Nonetheless, Glenfarne said in June that it these projects
Construction on Thi Vai LNG began late last was working to reach a final investment deci-
year. sion (FID) on the terminal, and it seems rea- are particularly
Other developments are also in the works, sonable to deduce that it will be keen to finalise
but have not yet moved to construction. Among the preliminary deal in order to move its project fast-moving.
these is Delta Offshore Energy’s Bac Lieu LNG- forward.
to-power projects. The developer is currently in The challenge for Vietnam, however, is that
negotiations over the power purchase agreement none of these projects are particularly fast-mov-
(PPA) that would underpin the project. ing. Meanwhile, there have been warnings that
Meanwhile, the Vietnamese government said power shortages will soon lead to blackouts in
in late June that super-major ExxonMobil was the country – potentially as soon as this year.
exploring opportunities to invest in the country’s Short-term solutions to this include ramping
LNG-to-power sector. According to Hanoi, the up coal imports. But this could have a negative
potential investments the company is looking impact on Vietnam’s ability to meet its goals of
into include a proposed 4-GW LNG-to-power reducing greenhouse gas (GHG) emissions by
scheme in the northern port city of Haiphong, 20-30% by 2030 and generating 80% of its power
which could enter service sometime in 2025-30. from gas within the next 15 years.™

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