Foreign experts optimistic about prospects for selling LNG to Vietnam

Foreign experts are optimistic about the prospect of selling more liquefied natural gas (LNG) to Vietnam in recent forecasts.

According to CNBC , energy industry observers expect Southeast Asia to be the main driver of the LNG market later this decade. Tony Regan, head of Asia- Pacific gas at energy and refining consultancy NexantECA, expects LNG demand from Europe to peak in 2027, before declining by 2030, when Southeast Asian customers emerge.

"That's when I think activity will be concentrated in Southeast Asia, especially Vietnam, Thailand, Indonesia," said Tony Regan. According to him, Vietnam is a bright spot for the LNG market, largely due to the Power Master Plan VIII. According to this plan, by 2030, the total capacity of power plants serving the domestic market will be 150,489 MW. Of which, LNG thermal power capacity will be 22,400 MW, accounting for 14.9%.

“Demand will grow very strongly in the next few years because 13 of the new power plants proposed in the plan will use LNG and another 10 will also use gas. So that will create a strong attraction for energy from Vietnam,” Regan predicted.

A corner of LNG Thi Vai port warehouse. Photo: PV Gas — A corner of LNG Thi Vai port warehouse. Photo: *PV Gas*

The Center for Global Energy Policy (CGEP) of Columbia University (USA) also assessed Vietnam as an important LNG growth market due to "strong population and economic growth". S&P Global estimated that Vietnam's GDP will increase from 327 billion USD in 2022 to 760 billion USD in 2030.

Shell (US) said it has seen "tremendous growth" in the LNG market in the past two months. It pointed to three countries as key drivers, two of which are from Southeast Asia. "We have supplied to three new countries - Germany, Vietnam and the Philippines - and all are very important potential LNG markets," said Steve Hill, executive vice president of Shell Energy.

Since at least 2017, the Vietnamese government has included LNG imports in its energy planning, announcing projects for five LNG import terminals and more than 10 LNG-fueled power plants. However, those plans did not materialize until 2019, when PV Gas, a subsidiary of the Vietnam National Oil and Gas Group, began construction of the Thi Vai LNG terminal.

Just in May 2023, PV Gas signed a contract to import the first LNG shipment to Vietnam with Shell. To import, PV Gas has completed the Thi Vai LNG port warehouse project, which has been certified by the Ministry of Industry and Trade as a qualified LNG exporter and importer.

LNG Thi Vai is currently the first and largest LNG warehouse in Vietnam, with a first phase capacity of one million tons per year, then expanded to 3-6 million tons per year. Upon completion, the project will supplement the supply of about 1.4 billion m3 of gas for Nhon Trach 3 and 4 power plants, industrial customers, as well as partially offset the domestic gas shortage after 2023, according to PV Gas.

In addition to PV Gas, a number of foreign companies have also begun to participate in the LNG sector in Vietnam. For example, Delta Offshore Energy (DOE) plans to build a liquefied natural gas power plant worth USD 4 billion with a capacity of 2.5–3 MTPA in Bac Lieu province. However, the project has not yet started due to some remaining problems.

AES (USA) has formed a joint venture with PV Gas to build and operate the Son My LNG terminal in Binh Thuan. In addition, ExxonMobil and JERA Japan are cooperating in an integrated LNG power generation project in northern Vietnam.

According to Resolution No. 55 of the Politburo, Vietnam sets a goal of developing the gas industry, prioritizing investment in technical infrastructure to serve the import of about 8 billion m3 of LNG by 2030 and 15 billion m3 by 2045.

CGEP believes that many Southeast Asian countries buy LNG through a combination of long-term contracts and spot deliveries. So Vietnam is likely to follow a similar path. But by 2025, Vietnam will have to compete with countries that rely on spot LNG supplies, especially in Europe, for gas.

Yi Tung

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