Sumitomo insists on building LNG power plant in central Vietnam

Japanese trading house Sumitomo has been pushing for a liquefied natural gas (LNG)-fed power plant investment in Vietnam’s central province of Khanh Hoa.

At a meeting with the province's Party chief Nghiem Xuan Thanh on Thursday, Nguyen The Vinh, chairman of Van Phong Power Company Limited – a subsidiary of Sumitomo, briefed on their plan to build Van Phong 2 LNG Power Plant with a capacity of 1,500 MW.

The meeting followed a talk between president and CEO of Sumitomo Corporation Shingo Ueno and Deputy Prime Minister Tran Hong Ha in Hanoi on October 8 where the executive voiced a proposal to invest in the power plant.

The Van Phong 2 LNG-fueled power plant is not among the LNG-fired power projects listed in the Plan on Implementing the National Power Development Plan VIII (PDP VIII) signed off by Deputy PM Ha in April this year.

In January 2022, the Khanh Hoa administration had asked the Ministry of Industry and Trade and the Prime Minister to include the Van Phong 2 LNG power plant in PDP VIII, which was issued in May 2023.

Per Sumitomo’s proposal, the Van Phong 2 LNG power plant would feature four turbines with a combined capacity of 3,000 MW and be built in two phases, with 1,500 MW set for each phase. The first phase is estimated to cost $2 billion.

Commenting on the project, Thanh, who was appointed as head the provincial Party Committee earlier this month, pledged to support the company’s business. He added that the local government will propose the establishment of a clean energy hub in the Van Phong Economic Zone to the central government.

Such a hub is part of the province’s efforts to attract more foreign investments, contributing to its socio-economic development, Thanh added.

Sumitomo’s $2.58 billion, 1,320-MW Van Phong 1 coal-fired power plant in Khanh Hoa entered commercial operation in October 2023.

Vinh informed that the plant produced 434 million kWh and paid VND631 billion ($24.82 million) to the provincial budget in 2023. This year, its output may reach 6.6 billion kWh and generate revenue of $760 million.