Vietnam will team up with Japan and the US to boost clean energy in the country’s energy mix that is currently dominated by fossil fuels.
| Vietnam, US firms sign the deal in November in the presence of APNSA O’Brien, US Ambassador to Vietnam Daniel J. Kritenbrink, and EXIM Kimberly Reed. Photo: US Embassy in Hanoi |
Japan and the US will help Vietnam switch to liquefied natural gas (LNG) from less clean types of fossil fuels as part of their campaign to help emerging economies minimize carbon emissions, according to the US Department of State.
The three countries reached a joint statement last week on the occasion of the 2020 Trilateral Vietnam-US-Japan Commercial Liquefied Natural Gas (LNG) Forum.
The trilateral cooperation is conducted under the concept of the Japan-US Strategic Energy Partnership (JUSEP) launched in 2017 to help nations develop energy-related infrastructure. Under which, the two countries positioned Vietnam as a top priority for 2020.
Japan and the US commended Vietnam’s leadership in upholding commitments made at the Asia-Pacific Economic Cooperation (APEC) forum three years ago, including Vietnam’s enacting of legislation to spur private sector investment and support market-led growth.
Vietnam has made great strides to diversify and invest in energy security for its future, they said.
In the statement, the US Department of State, Vietnam’s Ministry of Industry and Trade, and Japan’s Ministry of Economy, Trade and Industry acknowledge the importance of utilizing all energy sources and technologies with the private sector-led growth for the reduction of greenhouse gas emissions.
They argued that the energy transition in Vietnam is focusing not only on shifting from fossil fuels to renewables, but also to affordable, reliable, flexible, and resilient cleaner energy options and technology that would also contribute towards a post-pandemic economic recovery.
The three countries highlighted the essential role of LNG in improving energy supply security, reducing air pollution, and supporting the gradual transition towards a low carbon future in Vietnam.
For the above reasons, Japan and the US will support LNG-to-power and LNG terminal projects in Vietnam, in which companies of Japan, the US, and Vietnam participate and have access to the financial tools of Japan and the US.
The support helps promote the realization of essential energy policies and catalyze private sector investment in Vietnam and assist the targets and goals that Vietnam will set in its the National Power Development Plan 8 (PDP8) for the 2021-2030 period and vision to 2045.
| Vietnamese, Japanese companies sign deals in the presence of the two countries’ prime ministers in mid-October. Photo: PetroVietnam |
Increasing number of Japan, US-invested power projects in Vietnam
In the joint statement, Japan and the US pledged to provide financial assistance to Vietnam for the construction of LNG-fired power plants and receiving terminals.
The countries will also work on the construction of such facilities and training of the necessary staff, Nikkei Asia reported.
Over the last years, Vietnam has witnessed the increasing presence of Japanese and US investors in Vietnam’s power industry.
Between October and November, four big deals on LNG-to-power and LNG terminal projects were inked between US and Vietnamese firms.
The agreements worth billions of dollars each mark the investment of US giant firms namely General Electric, Bechtel Corporation, McDermott, and Delta Offshore Energy.
In October, Japanese utility Tokyo Gas and trading house Marubeni signed a memorandum of understanding to build a LNG-fueled power plant in Vietnam at an estimated total investment of US$1.93 billion with the aim of bringing the facility online in 2026.
Japan’s firms Tokyo Gas Co. and Marubeni Corp. and PetroVietnam Power Corp. signed two memoranda of understanding (MoU) to develop gas-fired power projects in Vietnam during Japanese Prime Minister Suga Yoshihide’s visit to Hanoi in mid-October.
The trio will start work on a 1,500-megawatt (MW) facility costing US$1.9 billion in Vietnam’s northern province of Quang Ninh. The project is the first of its kind in northern Vietnam using imported LNG.
With the participation of Japanese companies, the project might get soft loans from the government of Japan.
