Vietnam’s sluggish LNG-fired power projects can be expedited only under nation’s legal framework: Minister

Vietnam is striving to speed up progress on two sluggish LNG-fired power projects – Son My 1 and Son My 2 – but this has to happen within the nation’s legal framework, says Minister of Industry and Trade Nguyen Hong Dien.

The minister said on Friday during a discussion on the two projects with ambassadors from France, the U.S. and Japan.

The two mega LNG-to-power projects in the central coastal province of Binh Thuan, being built under the build-operate-transfer (BOT) format, have been moving slowly despite receiving in-principle approvals years ago.

The minister said that the two projects have “basically” completed their feasibility studies but were facing issues related to investments and input fuel pricing.

Per Vietnam’s latest national Power Development Plan VIII (PDP VIII), the two projects are set to begin commercial operations in 2027 and 2029.

Investors of the two projects have suggested supporting policies similar to those granted to BOT power projects, but Minister Dien clarified that such suggestions do not follow the current legal framework. Vietnam aims to proceed with the projects on the basis of shared benefits and risks, he said.

In 2023, state utility Vietnam Electricity (EVN) had complained about having to guarantee the import of input materials for BOT power plants when prices were high. This also meant that the utility had to buy power at higher prices.

Dien said Vietnam appreciates France, the U.S., Japan as key partners, including help rendered under the Just Energy Transition Partnership (JETP) for Vietnam to reach neutral carbon emissions by 2050.

The French, American and Japanese envoys affirmed that their countries would support Vietnam in pushing the progress of the two power projects.

The 2,250 MW Son My 1, developed under the build-operate-transfer (BOT) format, is jointly invested by France’s EDF, Japan’s Kyushu and Sojitz, and Vietnam’s Pacific Corporation, with an investment of $2.2 billion.

The investors were approved by the Prime Minister in 2018 and the project received in-principle approval from the Ministry of Industry and Trade in 2021.

The 2,250 MW Son My 2, also implemented under the BOT format, is jointly invested by the U.S.’s AES and Petrovietnam subsidiary PV Gas, with an investment of $2.1 billion. The investors were approved by the Prime Minister in 2019 and the project received in-principle approval from the trade ministry in 2022.

Both projects are located in Son My 1 Industrial Park of Ham Tan district, BInh Thuan province.