PV Gas to receive first LNG carrier for power generation

Petrovietnam Gas (PV Gas) will receive next month its first LNG carrier at the LNG Thi Vai terminal in Ba Ria-Vung Tau province for trial power generation of power plants in the southeastern region.

In a meeting with the Ministry of Industry and Trade on Thursday, PV Gas, a subsidiary of state-owned Petrovietnam, said both state utility Vietnam Electricity (EVN) and Petrovietnam Power, another Petrovietnam subsidiary, wanted to utilize LNG as an additional resource for power generation.

However, they also stressed that a suitable price mechanism was not yet available to ensure stable supply of LNG for power plants. Absent such a mechanism, fluctuations in LNG prices would make it difficult to access the fuel.

Pham Van Phong, CEO of PV Gas, proposed that the Ministry of Industry and Trade officially accepts LNG as a resource for power generation and provides negotiation guidelines for long-term LNG supply.

Nguyen Viet Son, head of the oil, gas and coal department, under the industry ministry, said the use of LNG for power generation was an inevitable part of Vietnam’s energy transition towards fulfilling the country’s net-zero emission commitment.

The ministry said it supported the move by PV Gas to supply LNG to power factories in the southeastern region. It urged the firm to proactively work with relevant agencies and reach agreements to facilitate expedited supply of LNG for power generation and other industrial activities.

Last month, PV Gas became the country’s first recipient of a license to import and export LNG from the industry ministry. The firm has already completed building needed facilities, including the 180,000-cubic-meter LNG Thi Vai terminal in the southern coastal province of Ba Ria-Vung Tau.

The terminal, able to receive ships of up to 100,000 deadweight tons (DWT), will have an annual LNG transportation capacity of one million tons of LNG in the first phase and three million tons in the second phase.

PV Gas also signed a confirmation notice last month with leading global supplier Shell, whereby the latter will deliver the first LNG cargo to Vietnam. The import will enable the commissioning and commercial operations of the Thi Vai LNG Terminal. Once commissioned, it will be the first and largest LNG terminal in Vietnam.

Vietnam has no LNG power plants operational at present. However, this is set to change as the government discourages coal-fired power generation, which supplies about half of the nation’s electricity output, in a bid to reduce pollution.

PV Power’s Nhon Trach 3 & 4 power plants, with a combined capacity of 1.6 GW, are Vietnam’s first LNG-to-power projects. These are under construction in the southern province of Dong Nai near Ho Chi Minh City.

The freshly approved Power Development Plan VIII (PDP VIII) is expected to open a new chapter for Vietnam's electricity industry, with gas to become a key source of power in 2021-2030. According to Vilaf law firm, the PDP VIII prioritizes maximizing the use of domestic gas for power generation. "In case domestic gas production decreases, natural gas or LNG will be imported."

The list of LNG projects of importance and priority for development until 2035 are prescribed under Table 1 of Appendix II, including Quang Ninh (1,500 MW); Thai Binh (1,500 MW); Nghi Son (1,500 MW); Quang Trach II (1,500 MW); Quynh Lap/Nghi Son (1,500 MW); Hai Lang Phase 1 (1,500 MW); Ca Na (1,500 MW); Long Son (1,500 MW); Hiep Phuoc Phase 1 (1,200 MW); Long An I (1,500 MW); Long An II (1,500 MW); and Bac Lieu (3,200 MW).