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29 May 2018 First LGN terminal picking up steam

The Thi Vai regasification terminal, the first imported liquefied natural gas infrastructure project in Vietnam, will be put out to tender in the next five months, and it is expected to pave the way for first imports to the country.

The feasibility study and front-end engineering design (FEED) for the first liquefied natural gas (LNG) project in the southern province of Ba Ria- Vung Tau have now been completed, Pham Van Pham director of LNG Vietnam JSC said.

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He added that an update for the project’s total capital investment is now in process to prevent any lack up requirements before tender invitation. “We met no difficulties in speeding up the progress of the project and are scheduled to bring the project out to engineering procurement and construction (EPC) tender before the end of this year.”

The first phase of Thi Vai regasification terminal will be designed with the estimated capacity of 1 million metric tones (mt) per annum. The construction of the project is expected to kick-start at the end of this year or early next year at the latest, Phong said

Together with the positive signals from the Thi Vai project, a big change in developments of the Son My LNG regasification terminal in the central province of Binh Thuan is expected to be seen. This is the second one of its kind, with the designed capacity possibly extending up to 10 million mt per annum.

“We are working with our potential partner to make a consortium to develop the Son My terminal, hoping to come to a conclusion within this year,” the LNG Vietnam director said. The project construction is slated for kick-off in 2019-2020.

The Thi Vai and Son My terminals are only two of the six regasification terminals set for the country’s LNG development planning, according to a Ministry of Industry and Trade decision issued in 2015. The six projects need a total capital investment of more than $6 billion.

The construction of LNG reserve and liquefaction bases, as required by overseas sellers, will help untangle the bottleneck Vietnam’s LNG growth, clearing the way for LNG imports, according to Phong.

Liquefied natural gas deals are emerging as a tempting target for investors thanks to drawing ever-growing interest from overseas players.

US-based AES Group, Japan’s Mitsui, Shell, and Alaska Gasline Development Corporation (ACDC) are some of the foreign giants that have their sights set on the potential LNG supplies into Vietnam.

Promising prospects

Over the last few years, LNG has been providing a different kind of energy security for countries that have grown up on a domestic gas production system.

A Shell representative told that the countries like Vietnam and Pakistan are facing the decline in domestic gas production. A fast-growing economy like Vietnam will need more and more energy in the future and LNG is well placed to provide it.

The Shell source supposed that Vietnam is amongst those countries where LNG will effectively be going in and replacing declining domestic gas production. According to the Woodmac first quarter 2018 forecast, Vietnam’s LNG imports can potentially start by 2023 and reach as high as 2.5 million mt/year by 2030.

“One LNG infrastructure is in place, we expect Vietnam to begin importing,” the Shell source said.

Importing LNG is urged as the local gas industry is estimated to generate the combined output of around 10 billion mt/year, including to the Vietnam Energy Association (VEA).

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VEA chairman Tran Viet Ngai said that LNG could be a significant element in the country’s energy supply in the time to come as many local power plants will have a gas shortage.

In the light of the National Power Plan VII, the total combined power capacity of local power plants will amount to about 129,500 megawatts (MW) by 2030. Of which 19000 MW will come from gas-fired power plants including LNG.

Accordingly, 10 billion mt are needed to meet the input of southern power plants between 2025 and 2030. Besides, Vietnam, on par with the national green growth trend, also needs a big LNG supply for several coal-fired power plants to be transformed into national gas-fired ones.