US firms are pouring money into Vietnam LNG market

A number of American companies are investing in the Vietnamese LNG market as a strategy to catch up with Vietnam’s energy transition and a way to help balance trade between the two countries.

US Secretary of Commerce Wilbur Ross and Vietnam's Prime Minister Nguyen Xuan Phuc in Hanoi on November 8. Photo: The US Embassy in Hanoi

Virginia-based AES signed an MOU with the Ministry of Industry and Trade to solidify cooperation on the Son My 2 Combined Cycle Gas Turbine (CCGT) Power Plant which costs an investment of US$1.7 billion. The power plant is expected to begin commercial operations in 2024.

Together with the US$1.4 billion Son My LNG import terminal, AES’s investment in complex project reaches almost US$3.1 billion and will play a major role in shaping Vietnam’s energy future by diversifying the energy mix.

“LNG provides a solution for clean and more reliable energy at a reasonable price, so it will play a key role in resolving more and more growing energy demand in Vietnam. Signing MOU this time is an important milestone for developing Son My 2 power plant, a project that we believe will help the energy industry transition in Vietnam,” said Mark Green, president of AES in Asia-Europe region.

Vietnam AES Executive Director David Stone said “The development of Son My 2 CCGT and Son My LNG Terminal projects is wonderful evidence of the partnership between the United States and Vietnam. We believe that implementing these two projects will significantly contribute to the bilateral trade and investment relationship between our countries, and create jobs and support Vietnam towards a more clean energy future.”

US-based ExxonMobil and PetroVietnam and PetroVietnam Exploration Production Corp (PVEP) are advancing the US$10-billion Ca Voi Xanh (Blue Whale) gas field – Vietnam’s largest offshore gas project with reserves of 150 billion cu.m. Between 9 and 10 billion cubic meters of gas are extracted every year.

“If the [Blue Whale] project goes forward, it is estimated to generate $20 billion in revenue to the Vietnamese government, thousands of local jobs and improved energy security from domestic gas development,” foreign media quoted President of ExxonMobil Development Company Liam Mallon as saying.

The construction of Dung Quat 1 and Dung Quat 3 in the central province of Quang Ngai has been speeded up to absorb gas from Ca Voi Xanh field.

Meanwhile Arkansas-based Murphy Oil signed the Block 15-2/17 production sharing contract (PSC) with Vietnam National Oil and Gas Group (PetroVietnam), PVEP and SK Innovation.

In addition, many American energy companies accompanied Secretary of Commerce Wilbur Ross during his visit to Vietnam two weeks ago. The names on the delegation include AES Corporation, Arkansas-based Murphy Oil, Capstone Turbine Corporation (CPST) – California based gas turbine manufacturer that specializes in microturbine power along with heating and cooling cogeneration systems, Cheniere Energy, Inc. – liquefied natural gas company headquartered in Houston, Texas, LNG Limited with offices in Houston, Texas, Perth, Australia, Lake Charles, Louisiana, and Halifax, Nova Scotia, and Tellurian Inc. – a natural gas company headquartered in Houston, Texas.

“…as we mark 25 years of trade relations between the United States and Vietnam, I am glad to see business leaders here working towards greater business-to-business ties between our nations. I am joined by a delegation of U.S. companies that are also looking to grow this important relationship,” said the secretary at a luncheon during his visit, according to the US Embassy in Hanoi.

Vietnam is estimated to import 3.6 million tons/year for the 2020-2025 period and 6-10 million tons/year during 2026-2035, according to the Nhip Cau Dau Tu magazine.