$2.3 bln Hai Lang LNG power project makes slow progress

The Hai Lang LNG-to-power project in central Vietnam, invested by South Korea's Hanwha Energy, Korea Gas (Kogas), Korea Southern Power (Kospo) and Vietnamese group T&T, remains entangled in capital contribution and site clearance issues.

The consortium broke ground for the first phase of the $2.3-billion LNG power complex in Quang Tri province’s Hai Lang district in January 2022, expecting to start commercial operations by 2026 or 2027.

However, the legal entity responsible for project development has not been established. Tran Quang Trung, deputy head of the Quang Tri Economic Zone management unit, said Kogas and Kospo are state-run Korean companies, and for capital contributions from $50 million onward, the Korean government must appraise the two firms’ plans.

Quang Tri’s Department of Planning and Investment in February guided the consortium on the establishment of such an entity.

Trung said, “The project’s feasibility study is in progress under Vietnamese laws. When complete, it will be submitted to the Korean government for appraisal. If the Korean government approves, Kogas and Kospo are allowed to contribute capital to establish the legal entity.”

As originally agreed, the three Korean companies are responsible for 60% of the total investment, while Hanoi-based T&T Group will contribute 40%.

As planned, the power complex would cover 148 hectares, including a terminal for LNG imports and power plants with a combined capacity of 1,500 megawatts in the first phase. The LNG terminal port would be able to handle vessels carrying up to 226,000 cubic meters of gas and receive 1.5 million tons of LNG per year.

Another problem the consortium is facing is slow site clearance. According to provincial figures, about 300 households have to relocate.

Since December last year, authorities in Hai Lang district have announced four site clearance decisions for some 146 hectares. Trung of the Quang Tri Economic Zone said the deadline to hand over an entire cleared land site to the project is the final day of this year, which may prove problematic.

The reason is the 148-hectare site is a large area, with a lot of work needed to be done by affected residents and the local administration. Meanwhile, there are several key projects in process in Hai Lang, therefore the site clearance deadline for the power project is far out of reach.