Vietnam, South Korea corporations expand energy cooperation

Petrovietnam, the state-owned group's arm PV Power, and private conglomerate T&T Group have signed agreements with South Korean partners that significantly enhance bilateral energy cooperation.

The signings were part of the Vietnam-South Korea business forum held under the auspices of the three-day (June 22-24) state visit by South Korean President Yoon Suk Yeol to Vietnam.

On June 21, Petrovietnam and Korea National Oil Corporation (KNOC) signed a memorandum of understanding (MoU) on exploration and production (E&P) activities including carbon emission reduction and crude oil storage. Petrovietnam said it was considering the signing of a new production sharing contract (PSC) for Block 15.1, which also has KNOC as a participant.

PV Power and EN Technologies on June 20 signed an MoU on market research cooperation to develop energy storage systems (ESS) and install ESS pilot projects. The cooperation follows the newly-approved national power development plan VIII (PDP VIII) under which Vietnam will gradually switch to using green fuels like hydrogen, ammonia and biomass for thermal power plants while developing diverse power sources, storage batteries and energy storage facilities.

Then, on June 22, PV Power and Korea Gas Corporation (KOGAS) signed an MoU on researching the production and supply of hydrogen for energy projects in PDP VIII. They also discussed other potential projects, including LNG-fired power generation.

A day later, PV Power and Doosan Enerbility Co., Ltd. signed an MoU on technological research aimed at reducing carbon emissions at the Vung Ang 1 thermal power plant in Ha Tinh province, central Vietnam. The MoU also covers study of ammonia-fired technology.

The same day, the T&T Group and KOGAS signed an MoU on developing LNG-fired power plants and transforming coal-fired power factories into LNG-fired factories in Vietnam. They will also study the possibility of producing hydrogen for operating upcoming power projects in line with PDP VIII.

In early 2022, T&T Group and three South Korean partners – KOGAS, KOSPO, and HANWHA, kicked off construction of the Hai Lang LNG-to-power project in Quang Tri province. The project is expected to start operations in 2026 or 2027, but remains entangled in capital contribution and site clearance issues.

On June 23, T&T Energy, a T&T Group subsidiary, signed an MoU on LNG-fired power generation with SK E&S, the energy arm of South Korean conglomerate SK Group. The two sides will cooperate in developing LNG terminals, with the South Korean partner sourcing fund to implement the projects.

The freshly approved Power Development Plan VIII (PDP VIII) is expected to open a new chapter for Vietnam's electricity industry, making gas a key power source in 2021-2030. According to the 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 mentioned 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).