Draft national power plan sidelines ExxonMobil's LNG-fueled project

ExxonMobil’s liquefied natural gas (LNG)-fueled power project in Haiphong is at risk of being removed from Vietnam’s power development plan VIII for the period 2021-2045.

A recent Government Office release stated that Deputy Prime Minister Le Van Thanh basically agreed with the Ministry of Industry and Trade’s (MoIT) draft PDP VIII, submitted on February 21.

Under the draft, the country’s installed power capacity until 2030 and 2045 will be 146,000 MW and 352,000 MW, respectively.

Notably, some power projects were scrapped under the new draft plan, compared with the one submitted on December 2021. These include thermal power plants Bao Dai in Bac Giang province, Pha Lai 3 in Hai Duong province and Quang Trach 2 in Quang Binh province, with a combined capacity of 2,020 MW.

Gas-fueled power plants Hai Phong 1 and 2 in Hai Phong city and Long An 2 in Long An province, with a total capacity of 7,500 MW were also removed.

The MoIT said the adjustments aim to assist the country’s endeavor to meet the Prime Minister’s emission reduction commitments at COP26 upon government request. "The alternative sources are onshore and offshore wind and solar power."

Previously, Hai Phong had proposed to have the city’s two LNG-fueled power plants, Haiphong 1 and 2, added to PDP VIII, namely the 4,500 MW project in Tien Lang 1 Industrial Park and the 1,600 MW one on Cai Trap island, Cat Hai district.

LNG is natural gas that has been cooled to liquid form for ease and safety for non-pressurized storage or transport.

Haiphong’s leaders said the LNG projects are necessary to ensure power security for the northern city and northern Vietnam.

The LNG power complex in Tien Lang 1 IP, as proposed by ExxonMobil, is capitalized at about $5.09 billion. The first phase will see three 750 MW turbines come into operation in 2026-2027, and the second phase, three 750 MW turbines operational in 2029-2030.

In the absence of ExxonMobil’s LNG power project in the draft plan, Peter Lavoy, Senior Director of International Government Relations at ExxonMobil, on March 7 met with Hai Phong city leaders.

At the meeting, Lavoy said the U.S. group had surveyed many localities with coastal routes in the country, but only Haiphong had many strengths in seaports, transport connections and transmission grid infrastructure. "The city is suitable for ExxonMobil to deploy future gas power projects."

ExxonMobil expressed its desire to continue receiving Hai Phong’s support to research and invest in the city, especially clean energy power plants.

ExxonMobil Energy Haiphong Ltd, Haiphong People’s Committee and Japanese power company JERA in October 2020 signed a memorandum of understanding on cooperation to develop the LNG power complex in Haiphong.

Vietnam, with most of its electricity generation coming from coal, is drafting PDP VIII that includes 22 LNG-fired power plants.

State-run PV Power last Monday awarded a $940 million contract to build Vietnam’s first LNG-fired power plants to a consortium of Samsung C&T Corp and Vietnamese firm Lilama Corp.

Under the EPC contract signed on the day, the consortium will build the Nhon Trach 3 and 4 plants with a total capacity of 1,500 MW in Nhon Trach district, the southern province of Dong Nai. The duo is capitalized at $1.4 billion.

In the first two months of the year, coal-fired power accounted for 43.6% of Vietnam’s electricity output (17.27 billion kWh). Next was hydropower with a 27.4% share (10.85 billion kWh). Renewable energy made for 16.8% (39.59 billion kWh), while the figure for gas-fired turbines was 11.1% (4.38 billion kWh), according to Vietnam Electricity (EVN).