New life injected into idle ventures in LNG

New life injected into idle ventures in LNG

Global energy giants and financial investors are renewing their interest in Vietnam’s evolving liquefied natural gas (LNG) landscape, breathing new life into several long-stalled power ventures.

In the north-central province of Thanh Hoa, the Management Board of Nghi Son Economic Zone and Industrial Parks has restarted the investor selection process for Nghi Son LNG power plant, with an estimated investment of over $2.24 billion, following more than six months of suspension.

According to Nguyen Anh Tuan, deputy director of the board, the bidding dossier will be open for submission until June 10. The competition is expected to intensify as several heavyweight consortiums have been shortlisted, including SOVICO-JERA from Japan, PetroVietnam Power Corporation, and T&T Group.

These investors have demonstrated both financial strength and strong determination to implement the project, which is identified in the adjusted Power Development Plan VIII (PDP8) as a key national infrastructure priority.

The 1,500MW plant is envisioned to play a pivotal role in ensuring energy security for Thanh Hoa and the broader north and north-central regions, especially as the risk of supply shortages looms amid accelerating demand and delays in northern power schemes.

The approved package reflects a reduction in both total investment and bid security requirements, adjusted to current regulatory and market conditions. However, the bar for financial and technical capacity remains high, requiring investors to commit minimum equity of $337 million and demonstrate extensive experience in LNG-to-power projects of comparable scale and complexity.

Beyond Nghi Son, Thanh Hoa is also seeing the resurgence of the Cong Thanh LNG power facility, which has been left idle for more than a decade.

Originally conceived as a 600MW coal-fired power plant, the project faced prolonged stagnation due to funding hurdles and shareholder restructuring.

However, it is now undergoing a profound transformation into a 1,500MW LNG-fired power plant, with investment revised to nearly $2 billion. This shift mirrors Vietnam’s broader energy transition commitments while addressing the urgent need for reliable power supply in the country’s northern economic hubs.

Thanh Hoa, where the Cong Thanh complex is located, recently clarified to the Ministry of Industry and Trade that its conversion will benefit from the synchronised infrastructure of the Nghi Son Economic Zone and its deepwater seaport complex, allowing efficient logistics and fuel importation. The developer has committed to fully converting the plant to LNG by 2028.

Once completed, the plant will consume up to 1.5 million tonnes of imported LNG per year, with its capacity tripling to 1,500MW. This transformation has also alleviated long-standing concerns over capital arrangements, with GE, BP, and Actis Investment Fund all reportedly involved in arranging financing, supplying equipment, and ensuring supply stability.

What sets the revival of Cong Thanh apart is the participation of this international alliance, transforming what was once a stranded investment into a symbol of Vietnam’s pivot toward cleaner energy and industrial modernisation.

BP, with its deep LNG expertise and global supply chain, is expected to play a central role in ensuring stable fuel supply and terminal infrastructure, while Actis brings its extensive experience in structuring sustainable energy investments globally.

GE, which is a leader in combined-cycle gas turbine technology, will provide cutting-edge equipment to enhance the project’s efficiency and flexibility, supporting Vietnam’s growing renewables integration.

However, despite these promising developments, both Nghi Son and Cong Thanh still face significant hurdles, including the need for complex LNG import and handling infrastructure, alignment with national grid expansion plans, and persistent volatility in global markets that could challenge the competitiveness of LNG-fired power.

In addition, the regulatory framework in Vietnam for LNG remains a work in progress, with critical elements such as power purchase agreements and long-term pricing mechanisms yet to be fully defined.

Nonetheless, the turnaround of these projects underscores the critical role of international collaboration and technology transfer in advancing Vietnam’s energy transition goals. If successfully implemented, they are poised to contribute up to nine billion kWh of electricity annually, alleviating supply pressures in the north while generating significant economic benefits and fostering supporting industries in Thanh Hoa’s Nghi Son Economic Zone.

LNG-to-power initiatives that use imported gas are identified as priority power sources for the 2025–2030 timeframe under the most recent PDP8 adjustment. It is anticipated that these projects will be crucial to maintaining energy security, especially in the north and north-central areas, where shortage risk is still quite high.

The strategy also calls for accelerating projects that can be brought online quickly and reliably, and highlights the necessity of coordinated development of LNG terminal infrastructure to support efficient import, storage, and distribution.

It is anticipated that Vietnam will have over 50,000MW of gas-fired electricity by 2035, including more than 36,000MW derived from LNG imports. This is a significant increase on the existing 7,900MW, mostly derived from domestic gas sources in the Cuu Long and Nam Con Son basins.

VIR