During his trip to Việt Nam last month, Russian President Vladimir Putin highlighted Russia's capability to both produce liquefied natural gas (LNG) in Việt Nam and supply it to the country.
"There are different options here: we can take part in the construction of the appropriate liquefaction capacities, or we can supply our liquefied gas from the territory of the Russian Federation. Either way, it’s possible, there are prospects here, there are corresponding blocks where we can operate and produce liquefied natural gas," he told the media.
In his article in the Nhân Dân (The People) newspaper on June 19 titled "Russia and Việt Nam: A Friendship Tested over Time”, President Putin announced plans for the Novatek group, Russia's leading LNG producer and exporter, to implement LNG projects in Việt Nam.
“The energy sector remains a strategically important area of bilateral cooperation. The Vietsovpetro joint venture, which has been exploring deposits on Việt Nam's continental shelf for more than four decades, has proved highly efficient," Putin wrote.
"The volume of oil it has produced over the years has exceeded 250 million tonnes. Rusvietpetro, a joint venture company established in 2008, is successfully operating in Russia's Nenets Autonomous Area. It has already extracted over 35 million tonnes of oil in the harsh conditions of the Far North. Gazprom, in turn, is engaged in gas extraction in Việt Nam, while another major Russian company, Novatek, intends to implement LNG projects on Vietnamese territory.”
Novatek is one of the few energy groups licensed by Russia to export LNG directly. Among the 11 cooperation documents signed between the ministries, sectors, and enterprises of the two countries during Putin's visit, one was a memorandum of cooperation in Việt Nam between the Việt Nam Oil and Gas Group and Novatek.
Earlier, Putin stated that Russia was ready to establish long-term direct supplies of hydrocarbons, including LNG, to Việt Nam, and Russian companies were ready to join large-scale projects using LNG as co-investors and suppliers.
In September 2023, Novatek CEO Leonid Mikhelson said that the company’s Vietnamese partners made a number of specific proposals to enter the republic’s market, but negotiations are complicated by the lack of a legislative framework for such projects and problems with demand.
Việt Nam’s plan for LNG
The Vietnamese government has placed liquefied natural gas (LNG) at the centre of its Power Development Plan VIII (PDP8) as a means to transition away from coal. Under PDP8, no new coal-fired plants will be developed after 2030.
The plan also imposes a deadline of June 2024 for these coal plants to proceed with their projects; otherwise, delayed or abandoned coal-fired ventures will be terminated and replaced by renewable or LNG-based power plants.
According to PDP8, Việt Nam expects to derive 25 per cent, or 37,000 MW of power, from LNG by 2030. This will require significant sector growth and investment. Domestic LNG projects currently produce just 7 billion cubic metres per year of usable gas, which is not enough to fulfil Việt Nam’s current needs.
In 2018, Việt Nam imported 55 per cent of the total LNG used domestically; by 2020, that number had grown to 70 per cent.
According to Việt Nam's gas industry development plan, the country will need to import 1 to 4 billion cubic metres of LNG per year from 2021-2025, increasing to 6 to 10 billion cubic metres per year by 2026.
Novatek’s interest
Before Putin's discussion about plans to provide long-term LNG supplies to Việt Nam, Russian media had frequently addressed this issue.
The Novatek group has shown interest in the LNG sector in Việt Nam on at least three occasions. LNG is regarded as the cleanest fossil fuel available today, as it does not produce soot, smoke, or dust during the combustion of natural gas. Furthermore, LNG-powered electricity is less dependent on natural conditions compared to wind or solar power, making it less prone to interruptions.
With these exceptional advantages, LNG has become a seismic name across continents. In the United States, El Pais reported that the appeal of LNG is akin to a modern-day gold rush, shaking energy centres to their core. Numerous LNG facilities have been constructed to meet export demands, making the US the world's largest LNG exporter in 2023.
According to a January report by Fortune, LNG terminals are proliferating along the European coastline. Last year, more than 20 new or expanded LNG terminals were planned across the European EET Hydrogen Power will be developed over two phases to reach a capacity of 125 MW of power
Essar Energy Transition (EET) on Friday said it will build EET Hydrogen Power, Europe’s first hydrogen-ready combined heat and power plant (CHP) at its Stanlow refinery in the UK in 2027.
EET Hydrogen Power will be developed over two phases to reach a capacity of 125 MW of power with 6,000 tonnes per day of steam, with the hydrogen replacing hydrocarbons delivering a reduction of 740,000 tonnes of carbon dioxide per annum, EET said.
The new plant will replace Stanlow’s existing boiler units, which currently generate nearly 50MW of power for the refinery operations. The plant is integral to the decarbonisation of operations at EET Fuels’ Stanlow refinery, which plans to cut total emissions by 95% by 2030, to become the world’s lowest carbon refinery, it said.
The investment will support EET Fuels’ ambition to become the lowest carbon process refinery, globally and EET Hydrogen’s ambition to become the leading low carbon hydrogen producer in the UK. It will also provide low carbon power to other industrial users in the region to support their decarbonisation targets. EET Hydrogen Power will become an independent vertical under EET, it said.
The investment into building Europe’s first hydrogen ready power plant is a key part of EET’s overall $3 billion of energy transition initiatives in the northwest of England, it said.
EET includes: EET Hydrogen Power; EET Fuels (which is the owner of the Stanlow Refinery); EET Hydrogen, (which is developing over 1.35 gigawatt (GW) of blue and green hydrogen capacity for the UK market, with follow-on capacity ambition of 4 GW); and Stanlow Terminals, UK’s largest independent bulk liquid storage terminal (which is developing enabling transport and storage infra for biofuels and new energies).
Tony Fountain, managing partner of Essar Energy Transition, said, “Launching EET Hydrogen Power shows the progress that Essar Energy Transition is making in delivering against its commitment to put the UK at the forefront of low carbon energy. EET Hydrogen Power helps bring this commitment to life and demonstrates our intention to globally showcase the pathway to decarbonising vital high emitting industries.”
Rob Wallace, CEO of EET Hydrogen Power, said, “We have bold ambitions for Stanlow to become a low carbon transition hub at the centre of the HyNet Industrial Cluster. EET Hydrogen Power will be Europe’s first 100% hydrogen-ready gas-turbine plant which will be supplied with EET Hydrogen’s low carbon hydrogen. This project will create significant benefit by contributing to regional emissions’ reductions targets.”
