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Bac Lieu LNG-to-Power Project included in revised power plan

Released at: 17:09, 24/12/2019

Bac Lieu LNG-to-Power Project included in revised power plan

Photo from VIR

Inclusion paves the way for project to be granted an investment registration certificate.

by Minh Do

The Office of the Government issued Letter No. 1725/TTg-CN on December 19 granting the Prime Minister’s approval of the inclusion of the Bac Lieu LNG-to-Power Project into the revised National Power Development Plan for the 2011-2020 Period and Vision to 2030 (PDP7R). The entire 3,200MW of capacity is included.

The Letter was signed by Deputy Prime Minister and Head of the National Steering Committee on Power Development Trinh Dinh Dung. It directed both the Ministry of Industry and Trade (MoIT) and the Bac Lieu Provincial People’s Committee to oversee coordination between various agencies and ensure the project’s competitive, transparent, and effective implementation.

The project’s inclusion in PDP7R is an important milestone that enables the people’s committee to grant an Investment Policy Decision, as authorized by Deputy Prime Minister Dung in Letter No. 5488/VPCP-CN issued by the Office of the Government on June 21, 2019. Five days after the Investment Policy Decision is made, an Investment Registration Certificate (IRC) will be issued to Delta Offshore Energy Pte Ltd (DOEPL) in accordance with the Law on Investment.

“The issuance of the IRC to DOEPL will signify a new model for Vietnam to attract much-needed private sector capital in energy infrastructure,” said Mr. Ian Nguyen, Managing Director of DOEPL. “It will be the largest FDI project in the Mekong Delta and underpin socioeconomic development in Vietnam’s ‘breadbasket’. Most importantly, the project will provide clean, affordable, and secure power to the south of Vietnam, where the country’s electricity shortages are most acute.”

DOEPL will coordinate with its strategic partners in the Bac Lieu LNG-to-Power Project, including US-based companies General Electric Company (NYSE: GE), LNG Limited (ASX: LNG), Baker Concrete, and others, to immediately expedite the development phase, starting with a fully-fledged feasibility study. In parallel with negotiations over the power purchase agreement with Electricity of Vietnam (EVN), DOEPL and LNG Limited will also begin finalizing a binding sale and purchase agreement (SPA) for the delivery of 2 million tonnes per annum (MTPA) of LNG from LNG Limited’s Magnolia LNG facility.

To push forward LNG utilization and LNG-to-Power development, the Vietnamese Government has proposed a series of initiatives within the Vietnam Gas Industry Development Master Plan to 2035, with gas production across the country to increase from 10 billion cu m per year to 21 billion cu m in the 2015-2035 period. To achieve this target, Vietnam will develop LNG terminal networks and related facilities. Three or four LNG terminals are to be built with an estimated capacity at each of around 1-3 million tons per year in the 2021-2025 period, and five or six LNG terminals with around 3 million tons per year in the 2026-2035 period.

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