Chan May LNG JSC will sign agreements involving American equipment, engineering, procurement, and construction, with equity and financing worth $6.2 billion of both United States and Vietnamese investment.
|LNG project illustrates new interest |
Chan May LNG JSC is a US-Vietnam joint-stock company for the development and operation of a $6.2 billion new gas-fired power plant in the central province of Thua Thien-Hue. The plant is the development of a liquefied natural gas (LNG) port for loading and off-loading, an on-shore LNG terminal, and a storage plant.
With power generation capacity of 4000MW, the project will commercially supply LNG and regular gas to the region and Thua Thien-Hue’s industrial and economic zones.
Chan May-Lang Co economic zone (EZ) is at the focal point of two major zones with the closest route to the East-West Economic Corridor. The private investment developed in the strategic Indo-Pacific region supports the Enhancing Development and Growth through Energy (EDGE) programme for Vietnam.
Vietnam’s power demand has risen sharply in line with rapid economic growth, constituting 12 per cent of GDP. As a result, resolving the power shortages expected in the future has become a pressing issue and top priority. Under the revised National Power Plan VII, the Vietnamese government strives to meet the annual power demand growth of 10 per cent by stepping up its power generation capacity to 95,500MW by 2025 and 129,000MW by 2030 through projects like Chan May LNG.
|" We bring experienced professionals with first-hand know-how of financing, building and operation of LNG power development." ‑ John Rockhold, CEO and vice chairman Chan May LNG JSC |
The project is divided into two phases. The first of 2,400MW is targeted to be completed and delivered in 2024; and the second of 1,600MW is to be delivered by 2028. The company expects the project to be integrated into the national power development plan within the next few months and meet all government regulatory requirements. About 3.5 billion cubic metres of gas per year will be imported from the US.
The United States is currently the world’s largest producer of natural gas. The gas supplies nearly a third of US primary energy usage and is the primary heating fuel for approximately half of US households. While the majority of natural gas is delivered in its gaseous form via pipelines in the US, the growth in the international market for natural gas has given rise to the use of natural gas in a liquefied form.
Data from 2017 shows that the US exported over 700 billion cubic feet of natural gas in the form of LNG in large tanker ships, along with small quantities shipped by container or trucks. In total the following year, US LNG had been delivered to 27 countries on five continents and the list of destinations has continued to grow since, especially to countries like Vietnam.
The consortium team for the Thua Thien-Hue power plant consists of international environmental firms with a combined experience of over 80 years in Vietnam, while the US investors and developers have a combined total of 60 years of development experience in the country.
Development of an LNG power plant in the Chan May-Lang Co EZ will likely generate positive economic impacts in a variety of ways on the local economy from the construction to the operational phase. A project of this nature and scale generally increases local GDP by 7-15 per cent during construction and 5-7 per cent during operations, according to experts. This increase in GDP over the life of the project will have significant benefits to families, local businesses, and the ability of the province to meet master plan objectives.
“Chan May LNG is pleased to support delivery of a world-class project in Thua Thien-Hue. We aim to achieve this by bringing together experienced professionals with first-hand knowledge regarding financing, supply, construction, and operation of LNG power development,” said John Rockhold, CEO and vice chairman of Chan May LNG. “Our US and Vietnamese consortium have a successful track record working with proponents of LNG and power plant developments, provincial governments, and local consultants to design and construct world-class operating assets.”
Chan May LNG will attend the Vietnam Energy Summit 2020 in Hanoi next month. The summit, originally scheduled for March but inevitably postponed due to the coronavirus crisis, will take place on July 22 at the capital’s International Convention Centre.
Co-organised by the government and the Central Economic Committee, various ministries and institutions such as the EU, the German Development Cooperation (GIZ), and the Embassy of Finland will be represented. Held with the aim of being timed with the Politburo’s resolution on Vietnam’s national energy development strategy orientation to 2030 and with a vision to 2045, the event is considered to be the most prestigious event in the country’s energy industry this year.