A new chapter for Vietnam’s energy transition journey

Could AG&P LNG shed light on the investment collaboration with Hai Linh and the development plan for Cai Mep LNG terminal in the near future?

AG&P LNG has completed the purchase of a 49 per cent stake in Cai Mep LNG terminal in Ba Ria-Vung Tau from Hai Linh, a leading petroleum trading company in Vietnam.

We are delighted to pour money into one of the top LNG terminals in Vietnam with an estimated value of $500 million and a capacity of three million tonnes yearly, expandable to six million tonnes per year. This investment deal helps commercialise the supply chain, transportation, and delivery of LNG through our integrated ecosystem.

We find Vietnam a lucrative market with high growth potential. Being part of the reputable Asian economy is also exciting and crucial for us. Our investment activities here will undoubtedly benefit partners and the country as a whole.

With the agreement, Hai Linh Company Limited and AG&P Group will officially form a comprehensive partnership focusing on developing LNG import and regasification facilities as well as a gas network. AG&P LNG will also provide design, project management, and other infrastructure services.

The financial agreement ceremony between AG&P LNG and Hai Linh

What problems have AG&P LNG and Hai Linh overcome together, and what obstacles are on the horizon?

During the collaboration process, AG&P LNG and Hai Linh have seen eye to eye on almost every important aspect, even on challenges.

In terms of paperwork, thanks to transparent and sincere communication, mutual sharing, and a strong desire to foster cooperation, negotiations between the two parties have been sealed in record time.

Regarding obstacles, unfamiliarity appears to be at the top of the list. LNG is a novelty in Vietnam, and the country has been working on finalising its legal framework and regulatory documents. This has resulted in discussions between the two parties to come up with a reasonable price once LNG is on the market.

Furthermore, LNG prices fluctuate daily on the global stage. Therefore, the sooner the legal framework is passed, the sooner Vietnamese enterprises can swiftly acquire LNG at favourable prices.

This situation presents an opportunity as the Vietnamese government is actively developing and finalising legal papers relating to LNG. Consequently, AG&P LNG stands as one of the pioneering enterprises in the field and is poised to commercialise promptly once the legal framework is approved.

How does AG&P LNG assess the demand for LNG in Vietnam?

Vietnam's significant potential and demand for natural gas as a fuel for energy production, industrial manufacturing, and transportation form the basis of our development strategy.

Additionally, Vietnam has a serious commitment to energy planning as per its Energy Master Plan for 2030, estimating LNG demand to be between 10 to 15 million tonnes per year, which has won us over.

Accordingly, Cai Mep LNG terminal is expected to contribute approximately five million tonnes per year starting from September, with increasing contributions annually.

The terminal is located near the Mekong Delta and is connected to major power plants, including the large Phu My power generation complex with a gas-fired capacity of 3.9GW. With a storage capacity of 220,000 cubic metres of LNG and convenient access to highways, the terminal aims to provide reliable LNG supply to key areas.

Cai Mep LNG terminal will play a pivotal role in enhancing energy security and facilitating Vietnam's energy transition. Collaboration with Hai Linh will ensure swift and safe entry of LNG into the Vietnamese market.

What is your take on the level of competition in the development and supply of LNG in Vietnam at present?

We are thrilled to be part of Vietnam's energy transition process, especially in terms of LNG imports. The development of more facilities like Cai Mep LNG terminal seems unlikely due to the lengthy process of research and development, as well as inflow demand. To be more specific, as per infrastructure, there will be demands for gas recirculation systems at factories and transportation systems with large capacities.

As we observe and delve into the domestic market, currently, there is only the existence of our terminal and a PVGas facility. However, the combined capacity of both terminals can only meet a small portion of the market requirement.

In addition, Hai Linh is the primary consumer of Cai Mep LNG terminal. As a result, we see abundant potential and room for continued development.

As LNG Cai Mep terminal comes into operation, we will strive to maximise its capacity. Subsequently, the two companies will look at expansion plans, with Vietnam's central region considered a promising destination.

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