Page 5 - AsiaElec Week 30

AsiaElec COMMENTARY AsiaElec

Plans unveiled for major Vietnamese

LNG-to-power investment

Rockhold said the plan was now awaiting in 2025-30. A 3-GW LNG-to-power scheme in
approval from the Vietnamese government, with Long An Province was also flagged as a potential
Chan May LNG hoping to receive an investment investment 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 Bac Lieu project with the proposed Magnolia
1mn tpy by 2023 with the start-up of Phase 1 LNG facility in the US last year. However, the
of the Thi Vai project. Thus in the short term, Magnolia project recently changed hands, and
gas demand still threatens to outstrip supply the new owner, Glenfarne Group, has not com-
and could lead to Vietnam ramping up its coal mented on the supply deal.
imports to meet power generation needs. Nonetheless, Glenfarne said in June that it
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-
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
these is Delta Offshore Energy’s Bac Lieu LNG- forward.
to-power projects. The developer is currently The challenge for Vietnam, however, is that
in negotiations over the power purchase agree- none of these projects are particularly fast-mov-
ment (PPA) that would underpin the project. ing. Meanwhile, there have been warnings that
Meanwhile, the Vietnamese government power shortages will soon lead to blackouts in
said in late June that super-major ExxonMo- the country – potentially as soon as this year.
bil was exploring opportunities to invest in the Short-term solutions to this include ramping
country’s LNG-to-power sector. According to up coal imports. But this could have a negative
Hanoi, the potential investments the company impact on Vietnam’s ability to meet its goals of
is looking into include a proposed 4-GW LNG- reducing greenhouse gas (GHG) emissions by
to-power scheme in the northern port city of 20-30% by 2030 and generating 80% of its power
Haiphong, which could enter service sometime from gas within the next 15 years.™

Week 30 29•July•2020 www. NEWSBASE .com P5