The USD1.99 billion (MYR9.35 billion) LNG-fired power plant initiative is part of Vietnam’s broader plan to develop 13 LNG-fired plants with a combined capacity of 22.4 gigawatts (GW) by 2030.
The memorandum of understanding (MoU) was signed during the Asia Green Growth Partnership Ministerial Meeting (AGGPM) in Japan, chosen as one of the 12 Asian projects for formalisation in the presence of delegates.
The proposed project, in Thai Binh province, is in Vietnam’s draft power development plan VIII for the 2021-2030 period, with vision until 2045. The plan, better known as PDP VIII, has not been approved yet.
After PDP VIII is promulgated, projects named in the plan will select investors for implementation. Normally, investor selection will take place via bidding.
Even when investors are selected and awarded investment certificates, these are only the initial steps in the implementation process and does not guarantee the projects will smoothly come online.
The key for LNG-to-power projects is to secure a power purchase agreement (PPA) from state utility Vietnam Electricity (EVN), because only this will ensure financing.
Delta Offshore Energy (DOE), the USD4-billion project investor, initially aimed to start construction in the second quarter of this year, has become entangled in procedure bottlenecks.
It is still negotiating a PPA with EVN. Without a signed PPA, the investor cannot negotiate with financial institutions for capital arrangements, according to the Singaporean company.
