Bac Lieu Power Project Opens 2021 Celebrating Major Milestones

Houston, TX, January 21, 2021 --(PR.com)-- 2020 closed on an exciting note for Vietnam’s revolutionary Bac Lieu LNG-to-Power (LNG2P) project. The first 100-percent privately funded major project in Vietnam, it will create a 3.2-GW power generation facility with an LNG receiving terminal, a regasification plant, a pipeline, and all associated infrastructure on and offshore, which will be built in the Mekong Delta province of Bac Lieu. By the end of 2020, the project had reached over 95% of its milestones to completion.

The final major step in the decision-making process, the signing of a Power Purchase Agreement (PPA) between Delta Offshore Energy (DOE) and the Vietnamese Government, began in earnest on 29 December. The PPA is a 25-year contract under which Vietnam will purchase electricity from Bac Lieu, with a lifetime value of approximately US $50 billion.

“This project is one of the foundation stones of a bright future for Vietnam,” said Bobby Quintos, Managing Director of DOE. “Because the PPA represents a great commitment from the Vietnamese people and a long-term relationship with DOE, both parties are proceeding in a spirit of diligence and collaboration to craft a responsible agreement that respects the interests of the people and the commercial viability of the project. As a pioneering project, this may take a little more time than was originally envisioned, but the work we do today will have a major impact on future generations. Our descendants and theirs will thank us for the care we applied today in looking out for their interests.”

The technical milestones achieved in 2020 by the Bac Lieu LNG2P team were also quite significant. Among them:

1. The Request for Proposals (RFP) from suppliers of liquefied natural gas (LNG), which essentially asks for a price quote on delivery of 25 years worth of LNG, reached a semi-final stage in which 9 bidders (from an initial field of 29 suppliers) remain.

2. The choice for design and construction of the LNG floating storage unit (FSU), a key element of the power plant’s fuel supply, reached the final stage, with DOE beginning review of the two most interesting bids.

3. International contractors McDermott completed the front-end engineering design (FEED) of the pipeline that will transport the gas from the regasification terminal to the power plant.

4. Regarding the onshore power plant itself, two important milestones were reached. Global engineering company Bechtel completed the all-important pre-FEED study necessary to establish the engineering basis of the plant, and international engineering firm Black & Veatch completed their Concept Study of the plant.

“The Bac Lieu LNG-to-Power plant will enable the clean industrialization of Bac Lieu province, which in turn will help the Government eradicate poverty and elevate the lives of the people of the region,” said Ian Nguyen, Managing Director of DOE based in Hanoi, Vietnam. “All stakeholders are aligned and committed to the goal of delivering reliable and affordable clean energy to Vietnam. It is a shining example of international collaboration, and will help Vietnam leapfrog in its socio-economic development to become a truly globalized economy of the future.”

Note:

The Bac Lieu LNG-to-power (LNG2P) project represents a revolutionary step for Vietnam. It is the first major project to be 100% private sector funded in Vietnam, and the first new step in the country’s transition from coal to gas as a primary fuel for power generation. It will help Vietnam achieve energy security, will support its industrialization, and will be a foundation for reducing poverty and improving quality of life in one of its poorest regions. Approved in Vietnam’s current national power plan (PDP7 revised), Bac Lieu LNG2P is now finalizing a binding power purchase agreement (PPA) with the Vietnam government.

Vietnam has emerged as the top Foreign Direct Investment destination in the region, and is well-placed to benefit from the “China Plus-one” strategy being pursued by many global industries. Vietnam’s rapid industrialization is straining its existing electric power grid, and serious shortages and outages are already an issue in some parts of the country, particularly in South Vietnam, which has the largest population and industrial cluster in the nation. Expected to enter into service in 2024, the Bac Lieu LNG2P project will help provide much-needed power security and will use LNG as the clean-burning fuel to do so.