Dong Nai province's authorities have asked industrial park operator Tin Nghia Corporation to facilitate work on the Nhon Trach 3 and Nhon Trach 4 LNG-to-power plants, the first such facilities in Vietnam.
So far, 85% construction has been completed on the two projects, but they are facing challenges related to the construction of cooling water facilities in an area that links with the Ong Keo Industrial Park managed by Tin Nghia Corporation.
Tin Nghia Corporation has reported that it is "processing" the 37-hectare area related to the two LNG power factories. The main issue is the handling of 28 hectares of rice paddy soil. The firm currently does not have a site to “relocate” or “reuse” the soil and has asked provincial authorities to help with the task.
Another trouble is that involved parties have yet to reach an agreement on fees for using areas within the Ong Keo Industrial Park for the cooling water facilities.
Dong Nai Vice Chairman Vo Van Phi has asked relevant departments to work with Tin Nghia Corporation to resolve issues. He also set a April 25 deadline for Tin Nghia Corporation to complete its land processing plan and submit it to the provincial Department of Agriculture and Rural Development for inspection.
PV Power, a subsidiary of state-run Petrovietnam, is the main investor for the Nhon Trach 3 and Nhon Trach 4 LNG-to-power plants that are set to begin commercial operations on November 15, 2024 and May 15, 2025, respectively. Construction of the power plants, with a total capacity of 1,620 MW and investment of $1.4 billion, started in 2021.
Earlier this month, PV Power reached agreement for a $300 million short-term loan from the U.S.’s Citibank and the Netherlands-based bank ING for developing the power plants.
Expensive power
Meanwhile, in a report sent to Prime Minister Pham Minh Chinh, state utility Vietnam Electricity (EVN) said it has begun negotiations for power purchase agreements (PPA) with Nhon Trach 3 and Nhon Trach 4 power plants.
However, both sides were struggling to reach an agreement. Power producers want EVN to purchase 72-90% of the electricity output so that they can secure long-term LNG deals.
EVN has also pointed out that LNG-fired power is costly at VND2,400-2,800 (9,4-11 U.S. dollar cents) per kWh, much higher than EVN’s average retail power price of VND2,006.8 per kWh in 2023.
The national utility said such commitments would lead to problems of high power prices and unfair treatment of other power producers without long-term PPAs.
It has proposed that the prime minister set a suitable rate for EVN to purchase electricity output of LNG-fired power plants in the long term. The rate should be high enough to attract LNG-to-power investment and at the same time, ensure fair competition among power producers and leave minimal impacts on power prices, it said.