Delta Offshore Energy, the lead-developer for Bac Lieu CCGT, had been waiting for the permit before commencing with the full development phase.
“Our investment model will be the predominant investment template going forward. The existing Public-Private Partnership model is obsolete given Vietnam's fiscal reality as debt levels approach the National Assembly's imposed ceiling and is re-enforced by Vietnam's sovereign credit rating threshold,” said Ian Nguyen, Director of Origination and Government Relations for Delta Offshore.
To ensure gas supply, Delta has signed an agreement with Australian-listed LNG Ltd, the developer of the Magnolia LNG venture to deliver 2 million tonnes per annum (mtpa) to Vietnam.
The shipments from Louisiana would be on a free-on-board (FOB) basis for a 20-year term, with options to extend. Once arrived at Bac Lieu, Delta will then regasify the landed LNG for use in its projected 3.2 GW combined-cycle power station.
Start-up scheduled for 2023
Delta is the lead-developer for the 3.2 GW power station at Bac Lieu, designed to consist of four 750 MW gas turbine units and a fifth unit with 200 MW. The integrated LNG import and power gen project is scheduled to start operations in 2023.
Detailed engineering work and a full feasibility study have been completed, with the LNG import solution being developed in cooperation with Norway’s 7 Seas.
“The Bac Lieu project addresses Vietnam’s need for an LNG import terminal to provide access to growing the LNG industry as a feedstock for electricity generation,“ said Bobby Quintos, engineering managing director for Delta Offshore Energy.
“Our alliance with LNG Limited will allow the Government of Vietnam to have a stronger relationship with the U.S. market and the long-term stability of the Henry Hub Index, which fits perfectly with the Vietnamese National Power Development Plan.”
Plans for 2nd LNG import terminal
Vietnam seeks to shifts its power sector towards gas generation and has made plans to import 5 mtpa of LNG by 2020, which will be gradually increased to 10 mtpa by 2030 and 15 mpta by 2035.
To accommodate these LNG import volumes, the Vietnamese government is supporting plans to develop a second LNG import terminal near a projected power plant in Ninh Thuan province. That project is backed by Novatek which will seek to supply it with fuel from its Yamal LNG export plant in northern Siberia, or the Arctic LNG II project in the long run.