State-run PV Power has 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 engineering, procurement and construction (EPC) contract signed on Monday, the consortium will build the Nhon Trach 3 and 4 plants with a total capacity of 1,500 megawatts in Nhon Trach district, Dong Nai province, southern Vietnam.
Capitalized at $1.4 billion in total, these are the first LNG-fueled power plants in the country. The contract value is more than $940 million, of which Lilama accounts for 39%, according to a release from Lilama, Vietnam’s leading construction company.
The Nhon Trach 3 and 4 are an important national project under Vietnam’s power development plan VII. The government has assigned PV Power, a subsidiary of Petrovietnam, to be the investor.
The main equipment consists of gas turbines, steam turbines, generators, heat recovery boilers, and distributed control system (DCS), supplied General Electric (GE). The gas turbines are of generation H, the most advanced and modern technology available in the world today.
The heads of agreement (HOA) on long-term maintenance and repair equipment for Nhon Trach 3 and 4 plants was signed between PV Power and GE.
PV Power is the project’s capital arranger, and it has confirmed that there would be sufficient financing for the project. This includes 25% equity and 75% loans from Export Credit Agencies ($600 million), overseas loans ($300 million), and local loans (VND4,000 billion or $174.8 million).
Nhon Trach 3 and 4 project is expected to start commercial power generation in 2024-2025, annually providing about 9 billion kWh to the national electricity grid.
The project aims to contribute to the implementation of the Prime Minister's “Net-Zero Emission Commitment by 2050” at the 26th United Nations, generate tax revenues of trillions of VND per year (VND1 trillion = $43.7 million), and creates jobs for thousands of people during the construction and operation, Lilama stated in the release.
“The project will also open a new chapter in forming and developing a series of LNG projects in Vietnam.”
Previously, South Korea’s Samsung C&T won a contract to build the Thi Vai LNG terminal project, also Vietnam’s first.
The Thi Vai-Nhon Trach LNG complex project includes the Thi Vai LNG Terminal and the Nhon Trach 3 and 4 LNG-fired power plants.
PetroVietnam Gas (PV GAS) last week said that it plans to test run the terminal in the fourth quarter of 2022. The terminal is due to supply imported LNG to the two power plants.
Vietnam, with most of its electricity generation coming from coal, is drafting its national power development plan VIII that includes 22 LNG-fired power plants.
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).