SK Innovation eyes over $2 billion Quynh Lap LNG thermal power plant

SK Innovation eyes over $2 billion Quynh Lap LNG thermal power plant

SK Innovation is interested in developing over $2 billion Quynh Lap LNG thermal power plant, drawing significant attention from international energy conglomerates, especially South Korean Groups.

The leadership of Nghe An People's Committee and SK Innovation at a meeting in mid-August

South Korea’s SK Innovation is seeking the opportunity to develop this project via submitting a draft joint development agreement to Nghe An People’s Committee, proposing the development of the Quynh Lap – Nghi Son LNG power plant with a total investment of approximately $2.15 billion.

In early July, Nghe An authorities held a working session with a delegation from SK Group, led by Youngwook Yoo, vice chairman of SK Innovation E&S, to discuss potential collaboration on the plant.

The plant would have a capacity of 1,500 MW with two units and is expected to consume about 1.15 million tonnes of LNG annually. Alongside the power plant, the plan includes an LNG storage facility, an LNG import port capable of receiving 100,000-150,000 DWT vessels, a breakwater, and a comprehensive auxiliary system.

SK Group stated that the project is expected to be operational before 2030, generating approximately 10.5 billion kWh of electricity annually, equivalent to nearly 4 per cent of Vietnam’s national electricity output in 2024.

The electricity from Quynh Lap is expected to alleviate pressure on North-South power transmission, stabilise grid frequency, and provide a reliable baseload source amid the rapid rise in renewable energy.

Compared to other major LNG projects, such as Long An I & II (3,000 MW, $3.1 billion) and Bac Lieu (3,200 MW, $4 billion), the Nghệ An venture would benefit from its proximity to a 500 kV transmission line, a deepwater port, and a rapidly growing load centre.

In addition to the Nghe An project, SK Group is also exploring LNG projects in Nghi Son (Thanh Hoa) and Ca Na (in Ninh Thuan), forming a high-tech energy-industrial cluster stretching from northern to south-central Vietnam. This reflects the group’s long-term strategy to support Vietnam’s development of green energy infrastructure.

SK Group, South Korea’s second-largest conglomerate, oversees approximately 200 subsidiaries operating in sectors such as energy, chemicals, logistics, IT, pharmaceuticals, and healthcare. With a market capitalisation of nearly $200 billion, the group has extensive experience in LNG development in the US, South Korea, and Singapore.

To date, SK Group has invested over $3.5 billion in Vietnam, focusing on clean energy, biotechnology, logistics, and IT. The proposed Quynh Lap - Nghi Sơn LNG plant underscores the group’s long-term commitment to expanding its presence and supporting Vietnam’s sustainable development goals.

The involvement of SK Innovation comes as another South Korean firm, namely POSCO International, is showing strong interest in LNG ventures in North-Central Vietnam.

In early July, POSCO International submitted a proposal to the Ministry of Industry and Trade, requesting direct designation as the investor for the integrated development of the Quynh Lap (Nghe An) and Nghi Son (Thanh Hoa) LNG power projects to optimise costs and ensure progress.

In a letter to Minister of Industry and Trade Nguyen Hong Dien, Lee Kye-In, chairman and CEO of POSCO International, recalled a February meeting in South Korea and reaffirmed the group’s capabilities and commitment to Vietnam’s energy market.

POSCO has been involved in the Quynh Lap 2 coal-fired power project since 2015, receiving investment approval in 2020. Building on this, the group is seeking to pivot to LNG power, submitting a pre-feasibility study for the Quynh Lap LNG plant in October 2023 and an investment proposal in October 2024.

The first promising investor is a consortium comprising PV Power, a subsidiary of state-owned giant Petrovietnam, Nghe An Sugar LLC, and SK E&S Co., Ltd. It has plans to use over 332 hectares, consisting of 60 ha of land and 272 ha of water surface.

Meanwhile, Power Generation Corporation 1, a subsidiary of state utility Vietnam Electricity, wants 260 ha to develop the project, including 60 ha of land and 200 ha of water surface.

A further promising investor is Japan’s Sumitomo Corporation, which is expected to be allocated 182 ha for the project, including 65 ha of land and 117 ha of water surface.

Another potential investor is a consortium comprising Viet Thanh Bamboo Energy Investment JSC and Qatar’s Gulf Petroleum Limited, which has plans to use 176 ha, made up of 58 ha of land and 118 ha of water surface.

VIR