PetroVietnam Power (PV Power) has taken a significant step forward in its energy landscape with the initial operation of Unit 3 at the Nhon Trach power plant, marking Vietnam’s first facility specifically designed to harness liquefied natural gas (LNG). This 812-MW unit, located in Dong Nai province near Ho Chi Minh City, is a pivotal part of a broader strategy to meet the surging energy demands of the nation. With Unit 3 now operational and Unit 4 expected to follow suit within the next year, PV Power is setting the stage for a new era in Vietnam’s energy generation.
The completion of these units comes on the heels of a substantial investment, with PV Power securing over $520 million in financing, bringing the total investment for both units to nearly $1.4 billion. The financial backing from international banks like Citi and ING is a testament to the project’s viability and the growing interest in Vietnam’s energy sector. Nguyen Duy Giang, CFO of PetroVietnam Corp., emphasized the importance of these projects, stating they are “key national projects” that will significantly contribute to the country’s power supply.
While some gas-fired plants in Vietnam have utilized LNG sporadically, the Nhon Trach facility represents a commitment to a more stable and sustainable energy source. This move aligns with the Vietnamese government’s ambitious plans to ramp up LNG-fired power generation, aiming for at least 15 LNG power plants by 2035, with a total capacity exceeding 22 GW. Currently, gas-fired power accounts for less than 10% of the nation’s total installed capacity, a figure that is set to rise dramatically as these new facilities come online.
The impact of this shift cannot be overstated. With the reliance on coal-fired power, which constitutes about 30% of the electricity production, the transition to LNG not only diversifies the energy mix but also positions Vietnam to address environmental concerns and global shifts toward cleaner energy. The operationalization of Nhon Trach 3 and 4 is expected to alleviate power shortages, particularly in the bustling economic hub of southern Vietnam.
Moreover, this project is just the tip of the iceberg. A second LNG-fired power project, the Thai Binh LNG Power plant, is already in the pipeline, with plans for construction to kick off by the end of this year. This ambitious endeavor is part of a broader narrative that suggests Vietnam is serious about transitioning to a more sustainable energy future.
As PV Power and its subsidiaries negotiate long-term gas supply agreements, the collaboration with GE Vernova and the operational staff’s successful “first fire” ceremony highlights the importance of partnerships in this evolving sector. The commitment of financial institutions and the strategic alignment with state utility Vietnam Electricity (EVN) further solidify the foundation for future developments.
In an era where energy security is paramount, the progress at Nhon Trach signifies a broader shift in Vietnam’s energy policy and infrastructure. It’s a clear indication that the country is not just catching up with global trends but is ready to carve out its own path in the energy landscape. With a solid plan in place and the backing of financial giants, Vietnam is poised to transform its energy sector, paving the way for economic growth while addressing the pressing demands of climate change.
