Vietnam's first LNG-to-power project inks power purchase agreement
PV Power, a subsidiary of state-owned Petrovietnam, has signed a power purchase agreement (PPA) with an unit of state utility Vietnam Electricity (EVN) for output from the Nhon Trach 3 and Nhon Trach 4 power plants.
The two plants are Vietnam's first LNG-to-power projects.
PV Power and EVN Electric Power Trading Company (EVNEPTC) signed the PPA on Friday, reaching a milestone in facilitating commercial operations of both plants.
Executives of PV Power and EVNEPTC sign a power purchase agreement (PPA) for the Nhon Trac 3 and 4 LNG-to-power plants in Hanoi, October 4, 2024. Photo courtesy of PV Power.
With no precedents regarding LNG-to-power projects in the country, PPA negotiation was a challenging process, PV Power said.
Negotiations began in 2019 under the supervision of the Government, the Ministry of Industry and Trade, EVN, Petrovietnam and the Commission for Management of State Capital at Enterprises (CMSC).
Signing the PPA will help PV Power reach a gas sale agreement (GSA) soon under its annual commitment to buy LNG and access loans from international bodies.
PV Power is the main investor for the 1,600 MW, $1.4 billion Nhon Trach 3 and Nhon Trach 4 plants in the southern province of Dong Nai. It is expected to provide nine billion kWh of electricity to the national grid annually.
Construction of the project began in 2021. Nhon Trach 3 is ready to make its "first fire" later this month and begin commercial operation in April 2025. Nhon Trach 4 is set for its "first fire" in December 2024 and begin commercial operation in July 2025.
Vietnam is yet to have a power plant that exclusively uses LNG as fuel. Some gas-fired power plants like Phu My 3, Phu My 2.1 and Phu My 4 have switched to use LNG as fuel from April onwards.
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