American firms gear up for Vietnam energy projects

Big U.S-backed energy projects are gathering pace in Vietnam, an energy-thirsty economy eyeing a net-zero goal by 2050.

American giant General Electric (GE) signed an agreement with Vietnam’s PV Power in Washington D.C. on Wednesday on developing solutions to improve efficiency of the Nhon Trach 1 gas-fuelled power plant, and a long-term cooperation deal on maintenance of the Nhon Trach 3 and 4 power plants.

The signing was witnessed by visiting Prime Minister Pham Minh Chinh and U.S. Secretary of Commerce Gina Raimondo. The three plants are in Dong Nai province, which borders Ho Chi Minh City.

PV Power, the power unit of state-run Petrovietnam, switched on the 450-megawatt Nhon Trach 1 plant in 2009. GE had supplied the main equipment for the plant. Solutions to improve efficiency of Nhon Trach 1 are critical, aimed at reducing production costs, raising capacity, and increasing profitability for PV Power.

PV Power on March 14 awarded a $940 million contract to build Nhon Trach 3 and 4, Vietnam's first LNG-fueled power plants, to a consortium of Samsung C&T Corp and Lilama Corp, a leading Vietnamese construction company.

With a total capacity of 1,500 MW and capitalized at $1.4 billion, Nhon Trach 3 and 4 are important national projects under Vietnam’s Power Development Plan VII.

On the same day, American corporation AES and PV Gas, the gas industry unit of Petrovietnam, secured an investment certificate for their $1.4 billion Son My LNG terminal project in Binh Thuan province, which borders Dong Nai.

Minister of Investment and Planning Nguyen Chi Dung handed over the certificate to AES and PV Gas leaders in Washington D.C., with the witness of PM Chinh and Raimondo.

The terminal will have an installed capacity of 450 trillion British thermal units (TBtu). It is expected to achieve financial completion in 2023 and begin commercial operations by 2026.

The terminal will receive, process and supply liquified natural gas (LNG) reprocessed as fuel for Son My 1 and Son My 2 power plants. “It will play a major role in shaping Vietnam’s energy future by diversifying the energy mix with imported LNG,” said David Stone, President of AES Vietnam.

Previously, Petrovietnam leaders on May 10 met with ExxonMobil executives in the U.S. to discuss ways to advance plans for the Ca Voi Xanh (Blue Whale) complex, a multi-billion dollar integrated gas-to-power development in central Vietnam.

Ca Voi Xanh is the largest gas field in Vietnam. Therefore, the execution of the Ca Voi Xanh integrated project in Quang Nam province has special meaning for the nation's energy security and economic growth. In particular, the project will have a transformational effect on the industrialization and socioeconomic development of central Vietnamese provinces.

During their meeting, Petrovietnam CEO Le Manh Hung and ExxonMobil’s Senior Vice President John Whelan discussed steps towards a final investment decision (FID), targeted in late 2023 or early 2024.

The FID will be based on a number of factors, including regulatory approvals, government guarantees, executed gas sales agreements and economic competitiveness.

The proposed integrated project is expected to produce and treat natural gas from the Ca Voi Xanh field, located offshore in Block 118.

As proposed, it would consist of an offshore platform, a pipeline to transport the gas to shore, an onshore gas treatment plant and pipelines that feed gas to third-party power plants to generate electricity locally.