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Tag: LNG

  • Vietnam’s First $1.4bn LNG Power Cluster to Ignite New Era of Clean Energy in 2022

    Vietnam’s First $1.4bn LNG Power Cluster to Ignite New Era of Clean Energy in 2022

    Vietnam’s first liquefied natural gas (LNG) power cluster, constructed at a cost of US$1.4 billion, is set to commence commercial operations on January 1. The Nhon Trach 3 and 4 LNG-fired plants are located in the southern province of Dong Nai and were launched by state-owned PV Power on a recent Sunday.

    Specifications of the Power Plants

    The two plants, which are designed to utilize imported LNG, boast an annual capacity of generating nine billion kilowatt-hours of electricity. The testing phase of the plants has been concluded, and they have received the necessary licensing to supply power to the grid, according to Nguyen Duy Giang, the Deputy General Director of PV Power, a subsidiary of PetroVietnam.

    Vietnam Electricity has pledged to purchase a minimum of 65% of the plants’ power output for a span of 10 years. This agreement is expected to yield revenues of approximately US$950 million (VND25 trillion) each year for the power plants. Additionally, their technology is designed to facilitate the use of hydrogen, exclusively if required.

    Significance of the LNG Power Cluster

    In a statement, Prime Minister Pham Minh Chinh recognized the significant role that the LNG power cluster plays in bolstering national energy security. He further encouraged the exploration and development of clean energy sources as a means of powering the country’s proposed investments in data centers, digital transformation initiatives, and semiconductor plants.

    As part of Vietnam’s revised power development plan, which was approved in April, LNG-to-power capacity is set to reach 22.5 gigawatts by 2030, a significant increase from less than 1 GW at present. This capacity would account for approximately 10% of the nation’s power mix.

    Questions & Answers

    What is the expected annual capacity of the Nhon Trach 3 and 4 LNG-fired plants?
    The plants are expected to generate nine billion kilowatt-hours of electricity annually.

    What is the financial outlook for these plants?
    Vietnam Electricity has committed to buying at least 65% of the power output from these plants for 10 years, which could generate about US$950 million in revenue each year.

    What contribution is expected from LNG-to-power capacity as per Vietnam’s revised power development plan?
    According to the revised plan, by 2030, LNG-to-power capacity is projected to reach 22.5 gigawatts, contributing roughly 10% to the country’s power mix.

  • Vingroup Launches Construction of Vietnam’s Largest LNG Power Plant, Paving the Way for Energy Advancement

    Vingroup Launches Construction of Vietnam’s Largest LNG Power Plant, Paving the Way for Energy Advancement

    In Hai Phong, a new chapter in the region’s energy landscape is underway as Vingroup, along with VinEnergo, kickstarts the construction of a significant liquefied natural gas (LNG) power plant. This ambitious project, stretching across 100 hectares and boasting a capacity of 4,800 megawatts, is set to energize the national grid by 2030, marking a pivotal step towards a cleaner and more sustainable energy future.

    Eco-Friendly Energy Takes Center Stage

    The plant’s utilization of LNG—a cleaner alternative to coal and oil—promises to curtail emissions, dust, and toxic gases, illustrating the ongoing transition towards sustainable energy sources. Located at the Tan Trao Industrial Park, which recently had its groundbreaking ceremony, the facility represents more than just a power source; it’s a catalyst for eco-friendly industrial development.

    Building a New Industrial Hub

    The Tan Trao Industrial Park itself covers 227 hectares with an investment of VND4 trillion, orchestrated by Vingroup’s property arm, Vinhomes. Over the next five years, construction is set to reshape this area into a nexus of new industries and technologies, with an aim to attract tens of thousands of skilled professionals. Amidst the hustle and bustle of construction, one might even wonder if Hai Phong will soon become the Silicon Valley of Vietnam—minus the tech giants!

    Government Support Fuels Development

    During the groundbreaking ceremony, Prime Minister Pham Minh Chinh underscored the strategic importance of these projects, highlighting their potential to advance industrial growth, attract foreign investment, and boost green energy initiatives. He urged rapid progression in the development of both the power plant and industrial park, particularly focusing on attracting high-tech clients.

    Aiming for Acceleration

    The Prime Minister called for accelerated procedures to enable the LNG power plant to potentially be completed a year ahead of schedule, by 2029. This calls for cooperation with foreign investors for technology transfer and a gradual mastery of the necessary tech. “Vingroup should push up progress while ensuring quality, safety, and environmental hygiene, to create numerous high-quality jobs for the people of Hai Phong,” he stated emphatically.

    Vingroup’s Vision for the Future

    Nguyen Viet Quang, Vingroup’s vice chairman and CEO, echoed the Prime Minister’s sentiments by discussing the synergy between the industrial park and the power plant. He believes that this integrated development model has the potential to attract significant investments and promote sustainable growth throughout the nation.

    A Manufacturing Powerhouse

    Hai Phong is not just any city; it’s a key manufacturing hub for Vingroup’s automaker, VinFast. Since the factory’s inauguration in 2019, VinFast has been a major driver of economic growth, elevating Hai Phong’s standing among Vietnam’s top-performing localities in recent years. As these new developments unfold, the city is poised to become a beacon of innovation and economic opportunity in the region.

    Questions & Answers

    What is the capacity of the new LNG power plant in Hai Phong?
    The LNG power plant in Hai Phong has a capacity of 4,800 megawatts and is expected to be operational by 2030.

    How does the LNG power plant contribute to cleaner energy?
    By using liquefied natural gas, the plant significantly reduces emissions, dust, and toxic gases compared to traditional coal and oil, aiding Vietnam’s transition to cleaner energy sources.

    What strategic goals did Prime Minister Pham Minh Chinh outline for these projects?
    The Prime Minister emphasized the importance of accelerating development, attracting foreign investment, and promoting high-tech industries, all while ensuring quality and creating job opportunities in Hai Phong.

  • PM Calls for Increased US Aircraft and LNG Purchases to Boost Trade

    PM Calls for Increased US Aircraft and LNG Purchases to Boost Trade

    Vietnam Urges Increased U.S. Imports to Strengthen Trade Relations

    In a recent governmental meeting, Prime Minister Pham Minh Chinh emphasized the importance of boosting imports of U.S. products, including liquefied natural gas, aircraft, and pharmaceuticals, to enhance Vietnam’s trade balance. This move comes amid ongoing negotiations with the U.S. aimed at fostering a more equitable trading partnership.

    Strategic Imports for Trade Balance

    During the meeting held on April 29, Chinh noted that while trade negotiations with the United States are progressing positively, securing contracts for essential imports is crucial for continued success. He highlighted the need for Vietnam to actively procure U.S. goods to maintain momentum in bilateral trade discussions.

    Chinh was addressing the backdrop of the recent suspension of high reciprocal tariffs by the Trump administration, which currently stands at a temporary rate of 10%. This pause offers an opportunity for Vietnam to align its import strategies with U.S. market demands.

    Upcoming Bilateral Trade Negotiations

    A Vietnamese delegation is scheduled to visit the United States on Thursday to engage in further negotiations on trade. These discussions will focus on achieving balanced and reduced import duties for both nations. Chinh aims to ensure that any trade agreements respect Vietnam’s sovereignty and national security while honoring international commitments.

    In addition to import duties, Vietnam plans to advocate for its classification as a market economy by the U.S. and seek the removal of restrictions on high technology exports.

    Impact on the Retail Sector and Consumers

    The push for increased imports from the U.S. is expected to not only bolster Vietnam’s trade balance but also to satisfy rising consumer demand for American products. As Vietnam seeks to diversify its import sources and strengthen bilateral relations, the effects on the retail sector could be significant, paving the way for enhanced availability of U.S. goods in the Vietnamese market. This strategic approach underscores Vietnam’s commitment to fostering robust international trade relations while catering to evolving consumer trends.

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  • Indonesia aim to export natural gas to Vietnam in 2026

    Indonesia aim to export natural gas to Vietnam in 2026

    Indonesia aims to export natural gas to Vietnam starting 2026 from the Tuna offshore block located near the Indonesian and Vietnamese maritime border, the country’s energy minister said on Friday.

    Southeast Asia’s biggest economy may deliver 100 to 150 million standard cubic feet per day of gas through a gas pipeline from the Tuna block operated by Harbor Energy, energy minister Arifin Tasrif told reporters.

    The company’s website shows that the Tuna oilfield, with around 100 million barrels of oil equivalent, was discovered in April 2014.

  • Remove 14,100 MW of coal plants from plan

    Remove 14,100 MW of coal plants from plan

    The Ministry of Industry and Trade wants coal-fired plants with a capacity of 14,120 megawatts scrapped from electricity production plans for Vietnam to achieve net-zero emissions by 2050.

    The plants were included in Power Development Plan 7 (for 2011-20) and have not been built due to delays. Now, the ministry does not want them to be part of Power Development Plan 8 (for 2021-30), which is being drafted.

    The ministry also wants to reduce the ratio of coal-fired power sources from 25-31 percent in 2030 to around 10 percent in 2045.

    No new coal-fired plant should be built after 2030, it said.

    It wants to increase output from LNG-fueled and renewable plants to offset the cut in coal use.

    It targets having 12,000-15,000 MW of renewables and 14,000 MW of liquefied natural gas plants in PDP 8.

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  • LNG power developers in troubled waters

    LNG power developers in troubled waters

    Liquefied natural gas (LNG) power has been considered a major part of Vietnam’s solutions for reducing carbon emission, but the country is facing several hurdles in using it.

    LNG emits half the amount of carbon compared to coal in electricity production, therefore several experts recommended that Vietnam focuses on it alongside renewable sources to achieve net zero carbon emissions by 2050, as Prime Minister Pham Minh Chinh committed at the COP26 late last year.

    Vietnam’s Power Development Master Plan 8 targets converting 18 gigawatts (GW) of coal-fired power into 14 GW generated from LNG and 12-15 GW from renewable sources.

    But for this, the country will have to import all of the LNG for generation – around 14-18 billion cubic meters in 2030 – at a time prices have it record highs following the Russia-Ukraine crisis.

    LNG prices have tripled in a year, according to the Institute for Energy Economics and Financial Analysis.

    In Europe, S&P Global Commodity Insights assessed LNG prices on a delivered ex-ship (DES) basis into north-west Europe (NWE) at $38.233/mmBtu on July 21.

    The competition between Europe and Asia at a time when global LNG supply is tight has recently pushed Asian LNG prices to a four-month high and close to record level seen in December at $44.35/mmBtu, according to Reuters.

    Nguyen Ngoc Hung, head of Energy Economics at the Vietnam Institute for Energy, cited international sources as saying prices would peak in 2023 before settling down.

    “LNG power plants will start operating in 2026-2030. Prices will be stable, and fall in the long term due to lower demand,” he said.

    The average LNG price for September delivery into north-east Asia was estimated at $38 per million British thermal units (mmBtu), down $2.5 or 6.2 percent, from the previous week, industry sources said.

    The Ministry of Industry and Trade has said the price rise would be manageable, with a 10-percent price hike only causing a 1.1-1.5 percent cost overrun.

    Determining prices to reach a power purchase agreement (PPA) is one of the key steps in developing a LNG power plant, but the unpredictability of prices is muddling the process.

    Half of the LNG projects under consideration in Vietnam are being delayed by unfinished PPAs.

    Responding to this situation, the Ministry of Industry and Trade said a few requests by LNG power developers are not in alignment with current regulations.

    It cited as an example the Bac Lieu gas plant, invested in by Singapore’s Delta Offshore Energy, which wants the state-owned utility Vietnam Electricity (EVN) to buy all the energy generated, apart from other incentives.

    Several LNG project developers have also said they are finding it difficult to mobilize capital with lenders focused on minimizing risks.

    Investors of the Hai Lang LNG power plant said the credit crunch was happening because projects implemented by independent power producers can only sell a limited output to EVN, making them less appealing in terms of profitability.

    Vietnam, a manufacturing powerhouse that currently generates most of its electricity from coal, is drafting a new national power development plan that includes 22 LNG-fired power plants. These will have a huge combined potential capacity of up to 108.5 gigawatts.

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  • Samsung Heavy lands $189 million LNG carrier deal

    Samsung Heavy lands $189 million LNG carrier deal

    Samsung Heavy Industries said Monday that it has clinched a deal worth 210 billion won ($189 million) to build a liquefied natural gas (LNG) carrier. The contract, with a European shipper, calls for Samsung Heavy to deliver the vessel by March 2021, the company said in a regulatory filing.

    With the latest contract, Samsung Heavy has clinched deals valued at a combined $6.3 billion so far this year to build 49 ships, including 18 LNG carriers and 13 container vessels.

  • LNG Canada investor Petronas signs gas supply deal with Vitol

    LNG Canada investor Petronas signs gas supply deal with Vitol

     LNG Canada, the US$30 billion (RM125.7 billion) liquefied natural gas (LNG) export project, has bagged another client after project shareholder Petroliam Nasional Bhd (Petronas) signed an initial sales deal with trading house Vitol.

    Royal Dutch Shell decided in October to construct the export terminal. It was the first major investment decision in a new North American LNG export project for two years and was expected to launch a new wave of such projects in the region.

    Petronas, the Malaysian state-owned oil and gas company that bought a 25% stake in the project in May, will supply Vitol with 0.8 million tonnes per year (mtpa) of LNG starting from 2024 for 15 years, Vitol said in a statement.

    “The primary supply to Vitol will come from LNG Canada as well as from (Petronas’) other global LNG supply portfolio,“ Vitol said.

    Vitol joins Asian utilities Tokyo Gas, Toho Gas and Korea Gas Corp (Kogas) as buyers, committing to offtake around 2.4 mtpa collectively.

    Such long-term agreements normally underpin project finance and are critical before a final investment decision is taken. But because Shell and partners Petronas, PetroChina, Mitsubishi and Kogas are such large players in the LNG market, they can absorb the output into their global portfolios without needing to find significant other buyers.

    Under previously announced deals, Toho Gas will buy 0.3 mtpa, Tokyo Gas 0.6 mtpa and Kogas 0.7 mtpa from LNG Canada.

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  • Moody’s downgrades Petronas LNG’s ratings outlook to negative

    Moody’s downgrades Petronas LNG’s ratings outlook to negative

    Moody’s Investors Service has downgraded Petronas LNG Ltd’s (PLL) ratings outlook to “negative” from “stable”, following the same outlook revision for its parent company Petroliam Nasional Bhd’s (Petronas) yesterday. At the same time, the rating agency has affirmed PLL’s A3 foreign and local currency issuer ratings.

    Moody’s said the changes reflects its negative outlook on Petronas’ ratings and its expectation of PLL’s continued strong support from and linkages with its ultimate parent.

    PLL is 100%-owned by Petronas, which is in turn wholly-owned by the government.

    Moody’s said given the negative ratings outlook, a ratings upgrade is unlikely and it will revise PLL’s ratings outlook to stable from negative only if Petronas’ ratings outlook is stabilised.

    It said that PLL’s ratings will be downgraded if: Petronas’ rating is downgraded; there is a decrease in Petronas’ ownership of PLL; there is a reduction in Petronas’ supervision of and operational and financial support to PLL; or there is a material increase in PLL’s risk appetite.

    PLL’s ratings were assigned using a top down approach by evaluating the company’s full ownership by Petronas, its strong operational and financial integration with Petronas, and the willingness and ability of Petronas to extend support to PLL in an event of distress.

    Meanwhile, Moody’s assistant vice president and analyst Rachel Chua said PLL’s A3 ratings are positioned two notches below the A1 ratings of its ultimate parent.

    She noted that PLL enjoys ongoing liquidity support from Petronas and it can draw from Petronas’ umbrella credit facility for liquidity management, adding Petronas has continued to support PLL financially through cash injections of almost $400 million over the past three years.

    “Petronas’ support for PLL extends beyond financial assistance. Petronas also provides PLL with significant management support and oversight, including monthly reporting on risk and governance to a committee chaired by Petronas.

    “PLL also has an integrated treasury function with Petronas, where its cash is held centrally by Petronas and cash flow requirements are shared with its parent,” she added.

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  • Bangladesh Signs Deal With Indonesia for LNG Imports

    Bangladesh Signs Deal With Indonesia for LNG Imports

    Bangladesh signed an agreement with Indonesia on Sunday (29/01) to open talks on imports of liquefied natural gas, as the South Asian country turns to the supercooled fuel to fill a shortfall of domestic natural gas.

    A letter of intent was signed between two state energy companies, Petrobangla and Pertamina, after a meeting between Bangladeshi Prime Minister Sheikh Hasina and President Joko “Jokowi” Widodo, who arrived in Dhaka on Saturday.

    Bangladesh, a country of more than 160 million people, may import 17.5 million tons of LNG a year by 2025, as its domestic gas reserves dwindle and demand grows.

    Petrobangla is finalizing several floating storage and regasification units, the first of which is expected to commence operations in April 2018.

    In September, Bangladesh signed its first ever LNG import deal with Qatar, underscoring the rise of South Asia as a new market for the fuel.

    Jokowi’s visit comes as Bangladesh is struggling to cope with an influx of around 688,000 Rohingya refugees who have fled an army crackdown in Myanmar’s Rakhine state since last August.

    “He reiterated his country’s support to the safe, dignified return of the displaced persons to the Rakhine State,” a joint statement said after Jokowi visited a refugee camp in the Cox’s Bazar region of southern Bangladesh.

    Hasina “appreciated Indonesia’s supportive role, including the humanitarian assistance for the displaced persons from Rakhine State sheltered in Bangladesh,” the statement said.

    Myanmar and Bangladesh agreed earlier this month to complete a voluntary repatriation of the refugees in two years.

    The plan has sparked fears in refugee camps in Bangladesh that people may be forced to return despite a lack of guarantees around their security. Witnesses have reported killings, looting and rape after the Myanmar army cracked down in response to militant attacks on security forces in Rakhine.

    Many in Buddhist-majority Myanmar regard the Rohingya community as illegal immigrants from Bangladesh. The United Nations has described the crackdown as ethnic cleansing, which Myanmar denies.

  • BP to expand in Indonesia

    BP to expand in Indonesia

    Oil giant BP is hoping to open around 350 petrol stations and convenience stores in Indonesia over the next decade, teaming up with Indonesian petroleum and chemicals logistics company AKR Corporindo to cater for drivers in Asean’s largest market.

    The joint venture would form a company, PT Aneka Petroindo Raya, to operate as BP AKR Fuels Retail, BP said.

    The Indonesian partner is due to take a majority slice of the joint venture, with initial plans for 14 directly managed sites from the third quarter of 2018, said AKR chief executive Haryanto Adikoesoemo. Franchises would be added later.

    AKR operates around 130 Indonesian gas stations under its own brand and Adikoesoemo said the firm wanted to benefit from BP’s brand appeal and convenience store expertise. Indonesia only had about 6,000 petrol stations, he said, with many more needed to meet growing demand.

    “We are delighted to be working with AKR to help meet Indonesia’s growing demand for fuels and provide superior convenience offers,” BP’s regional chief Tufan Erginbilgic said.

    BP specialises in products like high-octane fuel and lubricants. It hopes to tap the archipelago’s growing market with food, drinks and groceries.

    This year, BP bought the retail service station business of Australian retailer Woolworths and widening its Asia-Pacific interests, according to a spokesman.

    BP is reportedly hoping that combining fuel and retail will help increase its potential in Indonesia.

    Most Indonesian petrol stations are currently run by state-owned Pertamina, preventing international firms making much headway. UK-Dutch oil giant Royal Dutch Shell runs about 80 Indonesian petrol stations.

    Meanwhile, Taiwanese state petrol corporation, CPC Corporation Taiwan, says it will be partnering with Pertamina on a new joint refinery operation in Indonesia.

    Suggested refinery sites include the Regency of Situbondo in East Java, Lampung Province or possibly Kalimantan on Borneo.

    A decision was expected by the end of January, it was reported.

    A former consultant at Pertamina, Bayu Kristano, said Indonesia was refining enough oil to meet demand and was relying on imports. It was hoped, with Taiwanese expertise and cooperation, that Indonesia would be able to boost its petrol output in the coming years.

    Multinational partnerships are a growing trend across Asean’s road networks.

    Japanese retailer Lawson is working with petrol station operators in Thailand and the kingdom’s FamilyMart does the same in the Philippines.

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  • South Korea cuts natural gas rates by 6% on lower LNG import costs

    South Korea cuts natural gas rates by 6% on lower LNG import costs

    South Korea will cut retail natural gas prices for households and industry by an average of 5.6% from May 1 to reflect reduced LNG import costs, the Ministry of Trade, Industry and Energy said Thursday.

    It marks the third cut this year after rates fell 9% in January and 9.5% in March. South Korea cut city gas rates by more than 20% last year — 10.3% in May, 10% reduction in March, and 5.9% in January.

    “City gas rates have dropped by more than 38% since the end of 2014,” the ministry said in a statement.

    Despite the price cuts, the country’s LNG demand has been declining. LNG sales by state-owned Korea Gas Corp., which has a monopoly on domestic natural gas sales, fell 4.4% year on year to 3.14 million mt in March.

    For the first three months, Kogas’ LNG sales are estimated at 10.79 million mt, up 1% from 10.68 million mt a year earlier as its sales over January-February increased 3.4% year on year on a cold snap.

    Kogas sold a total of 31.46 million mt of LNG last year, down 10.6% from 35.17 million mt in 2014, which marks the second consecutive year of decline.

     

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  • South Korea cuts natural gas rates 9% from Jan on lower LNG import bill

    South Korea cuts natural gas rates 9% from Jan on lower LNG import bill

    South Korea will cut retail natural gas prices for households and industry by 9% on average from January 1 to reflect the lower LNG import bill as a result of sliding oil prices, the Ministry of Trade, Industry and Energy said Tuesday.

    “The government will further lower city gas rates if LNG imports costs continue falling,” the ministry said in a statement.

    The 9% cut will lower average retail gas prices to Won 15.69 ($0.01)/megajoule, from Won 17.24/MJ, the ministry said.

    South Korea cut city gas rates several times this year due to falling LNG imports costs — reducing prices by 5.9% in January, 10% in March and 10.3% in May but increasing prices 4.4% in September.

    LNG demand has fallen despite the price cuts. Kogas, which has a monopoly on domestic natural gas sales, sold 27.97 million mt in January-November, down 8.8% year on year.

    Kogas sold 35.17 million mt of LNG last year, down 9.1% from 2013, the first annual decline in five years.

    The trade ministry said Monday it expects South Korea’s LNG demand to fall 5% over the next 15 years due to a steep decline in consumption for power production that offsets mild growth by households and industry.

    It forecast LNG demand to fall to 33.96 million mt in 2022 and 34.65 million mt in 2029, compared with 2014 consumption of 36.49 million mt.

     

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