Coal-to-gas conversion gains traction

The developer of Cong Thanh Thermal Power has updated progress on coal-to-LNG transition for its project. Specifically, the company has secured clean premises, completed a capital arrangement with Actis Investment Fund, and it said it is seeking a partnership with foreign groups like BP to supply LNG and GE to provide equipment. The announcement was made at the end of August, a month after Thanh Hoa People's Committee requested the government consider Cong Thanh's proposal on July 11.

"Cong Thanh's conversion is suitable in the context of rising coal prices and the roadmap to reduce coal-fired power plants in the future according to the government's commitment to achieve the net-zero goal," said Ngo Duc Lam, former deputy director of the Institute of Energy under the Ministry of Industry and Trade (MoIT).

He said that investors were grasping opportunities from the National Power Development Plan VIII (PDP8), which opened the way to convert fuel from coal to LNG for projects that are behind schedule and could not arrange capital.

"It is not easy to add this power source to the master plan. Thus, the authorities are concerned about breaking the plan and setting a precedent for other power projects," Lam said. "The investor placed the project in Thanh Hoa, which is more convenient for the electricity transmission to the north than the LNG projects in the central and south. However, they have not considered the possibility of an LNG thermal power source being added to the PDP8."

In principle, the government will approve the coal-to-LNG conversion after the MoIT and related parties review the planning, power source structure, the investor's capacity, technical conditions, and a number of other factors.

"If approved, this project still has to go through a bidding process to select an investor. Ninh Thuan province has adopted the same approach to the Ca Na LNG power centre project," an analyst told VIR.

Given specific characteristics, LNG thermal power projects require large capital, and the implementation progress can take up to ten years.

The trend of the coal-to-LNG transition has been heating up since 2022, fuelled by the economic recession and the Russia-Ukraine conflict.

A recent study by the Institute for Energy Economics and Financial Analysis found that high gas prices and prolonged supply competition have reduced medium- and long-term demand as countries convert to alternative energy sources.

The Global Energy Monitor, an organisation dedicated to enhancing understanding of climate change data, estimated in a recent report that about 89.6GW (or 13 per cent) of the 692GW of global gas-fired capacity in development are coal-to-gas conversions or replacements.

East Asia has the most coal-to-gas conversions or replacements in development (29.6GW). By comparison, Europe has 19.7GW of coal-to-gas projects in development, while North America has 18.6GW of coal-to-gas projects in development.

1.3-billion-USD LNG terminal warehouse project gets greenlight The People's Committee of Binh Thuan province has issued a decision approving the investment of Son My liquefied natutal gas (LNG) terminal warehouse project in the south-central province’s Ham Tan district.

Flaws in infrastructure hinder plans for LNG The possibility that electricity generated from liquefied natural gas will replace coal-fired power is some way off, with infrastructure concerns regarding import operations coming to the fore.

Weight still placed on imported LNG Vietnam’s growing dependence on imported liquefied natural gas could cause a hike in power production costs.