Bac Lieu LNG-to-power project gets Vietnamese government backing

Vietnamese government included the entire 3,200 MW Bac lieu LNG-to-power project into the National Power Development plan for 2011-2020.

Magnolia LNG project rendering (Image courtesy of LNG Limited)

In its letter, the government office of Vietnam addressed both the Ministry of Industry and Trade and the Bac Lieu Province People’s Committee to oversee the coordination of various agencies and ensure a competitive, transparent and effective implementation of the project.

The project’s inclusion in PDP7R is an important milestone that enables BL-PC to grant the Investment Policy Decision as authorized in June 2019. Five days after the Investment Policy Decision is granted, the Investment Registration Certificate (IRC) will be issued to Delta Offshore Energy (DOEPL) in accordance with Vietnam’s law on investment.

DOEPL said in its statement it will coordinate with its partners in the Bac Lieu LNG-to-Power Project including US-based companies General Electric Company, LNG Limited, Baker Concrete and others to immediately expedite the development phase starting with the full-fledged feasibility study.

In parallel with the negotiations of the power purchase agreement with Electricity Vietnam (EVN), DOEPL and LNG Limited will also begin finalizing a binding sale and purchase agreement (SPA) for delivery of 2 million tonnes per annum (mtpa) of LNG from LNG Limited’s Magnolia LNG facility.

Commenting on the events, Greg Vesey, executive chairman, managing director, and CEO of LNG Limited said, “As we have previously disclosed, the approval of the amendments to Vietnam’s Power Development Plan 7 was the prerequisite for execution of our binding sales and purchase agreement with our partners, Delta Offshore Energy, for 2 mtpa from Magnolia.”

He added that the company will immediately begin completing the terms of the 25-year deal which will be the first long-term sale and purchase agreement for LNG to Vietnam.