Bac Lieu People’s Committee expects that the construction of 3,000MW LNG Bac Lieu would be kicked off later this year, despite having to deal with numerous problems.
|LNG Bac Lieu project expected to start in late 2021 |
According to Pham Van Thieu, Chairman of Bac Lieu People’s Committee, Delta Offshore Energy Pte., Ltd. (DOE), the investor of the LNG Bac Lieu project is facing difficulties in negotiating the power purchase agreement (PPA) as the parties have yet to reach a compromise over the selling price of power and the power purchase volume. It is currently unsure whether the entire 3,200 MW generated by the plant will be bought.
In April 2020, DOE and Electricity of Vietnam (EVN) had an official online working session for the first time to discuss works related to the project, with the target of signing the PPA before October 2020. In addition, the National Steering Committee for Electricity Development proposed the investor of Bac Lieu LNG-to-power project to keep the selling price of power at 7 US cent per kWh to save time. However, the two parties have yet to sign the contract due to a failure to agree on the above points.
In addition, the investor is also concerned that it invests in the project in USD but the power purchase party will use Vietnamese dong to pay for power, which poses exchange rate risks.
“The parties are also negotiating unprecedented problems in attracting foreign investment wehre the existing regulations have no guidance,” Thieu said.
The province will work with the government, ministries, and relevant authorities to deal with problems and complete the remaining procedures so that the investor can start the construction by the end of this year.
Recently, the province already worked with the Ministry of Industry and Trade and the Institute of Energy to accelerate the implementation of the project.
The Institute of Energy will accelerate procedures to propose Bac Lieu People’s Council to change the land use purpose of the forest area located on the project land. The move aims to support relevant authorities in submitting the environmental impact report to the Ministry of Natural Resources and Environment.
Thieu added that the government approved the plan to develop a 500kV power line to ensure power transmission of the project.
According to the investor’s plans, the first phase of the project with the capacity of 800MW is expected to start operation in 2024 and the construction of the entire project is expected to be completed in December 2027. The complex of LNG port and warehouse will be located at the coastal area of Bac Lieu, 35km from the power plant.