Investors seek 2-year delay for $2.56 bln LNG power project in northern Vietnam, citing equipment hurdles

Investors of a $2.56 billion LNG-fired power plant in Hung Yen province have proposed delaying the project’s commercial operation schedule by two years due to difficulties securing key equipment.

The proposal was submitted as part of feedback on the Industry and Trade Ministry’s draft resolution to address obstacles in national energy development for 2026-2030, including updated mechanisms for LNG-to-power projects.

Thai Binh LNG JSC, the project developer, said global shortages of gas turbines have made it increasingly challenging to maintain the current construction schedule.

The company cited surging LNG power investments in the Middle East and the U.S., which have stretched manufacturers’ capacity and led to long delivery lead times.

The investor has also yet to finalize financing agreements with international lenders, preventing it from signing turbine purchase contracts, despite efforts to meet its original commercial operation date (COD) target of 2030.

To mitigate the delays, Thai Binh LNG proposed extending the COD from January 1, 2031, to January 1, 2033, should the turbine supply shortage persist.

However, the ministry rejected the proposal, implying that the draft resolution would not include such an extension.

The company also requested revisions to its power offtake terms, arguing that the existing long-term commitment – at least 75% of contracted output for up to 10 years – was insufficient to ensure financial viability.

It further proposed that Vietnam Electricity (EVN) guarantee capacity payments regardless of actual dispatch, provided the plant remains available for generation.

In response, the ministry said the resolution only outlines minimum contractual requirements, while specific commercial terms should be negotiated between buyers and sellers to balance risk and returns.

The Thai Binh LNG power plant, which broke ground on October 10, is developed by Thai Binh LNG Power JSC, a joint venture between Japan’s Tokyo Gas (40%), Kyuden International (30%), and Vietnam’s Truong Thanh Group (30%).

The plant will occupy 263.5 hectares within the Thai Binh Economic Zone, including 53.8 hectares of land for the power plant and auxiliary facilities, and 209.7 hectares of water surface for LNG regasification terminals, pipelines, and related infrastructure.

With an installed capacity of 1,500 MW, the plant will utilize combined cycle gas turbine (CCGT) technology and is expected to operate 6,000 hours per year, generating six-nine billion kWh annually.

The facility will consume approximately 1.2 million tons of imported LNG per year as its primary fuel source, supplemented by 17,000 tons of domestically supplied diesel as backup. LNG imports are expected to come from Australia, Qatar, the U.S., and Russia.

The Ministry of Industry and Trade (MoIT) has proposed an offtake of no less than 75% of the average annual electricity output for LNG-to-power projects. This guaranteed offtake will apply during the period of debt principal and interest repayment but shall not exceed 10 years from the project's commercial operation date, according a parliament resolution being drafted by the ministry.

This policy applies to imported LNG-to-power projects that receive approval from relevant state agencies upon project completion and begin commercial operation using imported LNG from the effective date of Law 61/2024/QH15 until before January 1, 2031.

VinEnergo, a subsidiary of private conglomerate Vingroup, has submitted feedback on the draft. While agreeing with the 75% minimum offtake rate, the firm proposes extending the term to up to 25 years (compared to the current draft's 10 years) for projects entering commercial operation between January 1, 2030 and December 31, 2031.

For projects that begin operations earlier, from January 1, 2026 to December 31, 2029, VinEnergo suggests a minimum offtake rate of no less than 90%, also applied over a debt repayment period of up to 25 years, significantly higher than the 75% and 10-year limits proposed in the draft.

In response, the MoIT noted that there is no sufficient basis to assess the feasibility of a 25-year term and that it may not balance the interests between power sellers and buyers. Regarding offtake levels, the ministry emphasized that the resolution only sets a minimum threshold, and that actual figures could be higher depending on project structure and mutual agreements between parties to ensure a balance of interests.