Vietnam has inaugurated its first cluster of power plants fuelled by imported liquefied natural gas (LNG), marking a milestone in the country’s push to secure electricity supplies from a cleaner fossil fuel in one of Asia’s fastest-growing economies.
The Nhon Trach 3 and 4 LNG-fired plants were recently inaugurated in Dong Nai province, an industrial hub north-east of Ho Chi Minh City.
The USD 1.4bn project has a total capacity of 1.6 gigawatts (GW), with investment from PetroVietnam Power Corporation (PV Power), a subsidiary of the state-owned PetroVietnam, with a Lilama-Samsung C&T consortium serving as the contractor.
With its ground-breaking in 2022, it is Vietnam’s first LNG-fired power plant project to secure nearly USD 1bn in financing without government guarantees – a milestone closely watched by both local and international investors.
Earlier this year, PV Power also signed a 25-year agreement with its sister company, PetroVietnam Gas (PV Gas), to supply LNG to the two plants, marking the country’s first long-term LNG supply contract with a committed volume of 530 million cubic metres (cu m) per year for the first five years.
Vietnam sees LNG as a critical “bridging fuel” between coal and renewables with significantly less carbon and air pollutants. More importantly, for Vietnam’s grid, gas-fired plants can serve as a reliable base load and help stabilise the power system as wind and solar – inherently intermittent sources – expand rapidly.