Liquefied natural gas is entering the spotlight in Vietnam as the country tries to wean itself off carbon-intensive coal, keeping pace with a growing regional trend that could be tripped up by intensifying competition for the fuel.
Samsung C&T and Vietnamese construction company Lilama announced in March a $940 million engineering, procurement and construction contract for what is expected to be the country's first LNG-fueled power plant. The 1,500-megawatt facility will be operated by PetroVietnam Power, a unit of state-run Vietnam Oil and Gas Group, and is slated to come online in 2024 or 2025.Vietnam now generates roughly half its electricity from coal, which is usually cheaper and more accessible than other fuels. But its high carbon footprint is not compatible with Prime Minister Pham Minh Chinh's pledge last November to achieve net-zero emissions by 2050.
The ruling Communist Party remains resolute against nuclear power after scrapping plans for Japanese- and Russian-backed plants in 2016, while output from renewable sources like solar and wind tends to fluctuate. LNG -- which, although a fossil fuel, generates about half the emissions of coal when burned -- is seen as a more promising route to cutting back on carbon.
The country has more than 20 LNG-fired power plants in the pipeline nationwide, according to local media reports. Tokyo Gas and Japanese trading house Marubeni plan to build a 200 billion yen ($1.5 billion) facility in the province of Quang Ninh near Hanoi, and Japanese energy group JERA is eyeing an LNG power plant and terminal in northern Vietnam.