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Nov 22, 2020 / 23:18

Vietnam, US firms sign US$1 billion LNG power deal in O’Brien visit

The project is the fourth in the energy sector signed between Vietnam and US firms over the past month.

A Vietnamese firm and General Electric (GE) Co. have signed a deal for a power project worth an approximate US$1 billion during the Hanoi visit by US National Security Adviser Robert C. O’Brien.

 Vietnam, US firms sign the deal in the presence of APNSA O’Brien, US Ambassador to Vietnam Daniel J. Kritenbrink, and EXIM Kimberly Reed. Photo: US Embassy in Hanoi

On Sunday, GE signed the deal to provide equipment, services and equity to a liquefied natural gas (LNG)-to-power plant capacity 3,600 megawatts (MW) in the presence of O’Brien and Kimberly Reed, president and chairman of the Export-Import Bank of the United States (EXIM).

The signing of the Long Son LNG-to-power project was carried out by representatives from General Electric, GENCO3, Pacific Corporation, PECC 2, Mitsubishi, and TTC Group.

This project that is located in Vietnam’s southern province of Ba Ria-Vung Tau, will bring 1,500MW of clean power to Vietnam, strengthening Vietnam’s energy security and supporting its economic development.

Series of US-invested power projects within a month

This is the fourth LNG power projects signed by US investors over the past one month.

Late last month on the occasion of the 2020 Indo-Pacific Business Forum (IPBF) in Hanoi, Vietnam and the US signed memoranda of understanding (MoU) for three big LNG-to-power projects and one LNG terminal.

The first one is an agreement to provide equipment and services worth more than US$3 billion for a liquefied natural gas (LNG)-to-power project in Vietnam’s Mekong Delta signed by three American companies namely Bechtel Corporation, General Electric and McDermott.

The signing is aimed to utilize the best-in-class American technology and engineering from the US for the 3,200-megawatt Bac Lieu LNG-to-power project developed by US-headquartered Delta Offshore Energy.

Costing US$4 billion, this is the biggest foreign direct investment project in the Mekong Delta so far, scheduled to become fully operational by the end of 2027.

The second one is preliminary agreement signed between General Electric and VinaCapital, a Vietnam-focused venture capital firm, for the development of the Long An LNG-to-power project in the southern province of Long An. Under the MOU, GE will supply gas turbines and other equipment.

VinaCapital is in partnership with the Long An provincial government to develop the project that will have a power generation capacity of 3,000MW, intended to replace a proposed coal-fired power project that was abandoned due to environmental concerns.

The third one is between AES Corp. and Petro Vietnam Gas (PV Gas) for a joint venture agreement to develop the Son My LNG Import Terminal Project for about US$1.4 billion. The terminal will have a capacity of 3 million mt/year of LNG in the first phase, which would be doubled to 6 million mt/year in the second phase.

Son My LNG will supply gas to the 2.25 GW Son My 1 and 2.2 GW Son My 2 power plants from 2024. AES had signed an agreement with the Vietnamese government to build the $1.8 billion Son My 2 combined-cycle gas turbine power plant last year. Son My 1 will be built by a consortium led by France's EDF.

The fourth project is a MoU for ExxonMobil Haiphong Energy Pte Ltd (EMPHE), Hai Phong People’s Committee and Japan power generation company JERA to work together on a potential integrated LNG to Power project in Haiphong.

The cooperation is aimed to expand on their strong cooperation and exchange of expertise to jointly study natural gas market development opportunities, including LNG import facilities and gas-fired power plants.