South Korean state-controlled liquefied natural gas (LNG) importer Korea Gas Corporation (KOGAS) has signed a memorandum of understanding with US-based, Vietnam-focused investment fund Energy Capital Vietnam to build a regasification terminal in Bình Thuận province to satisfy rising LNG demand in the Southeast Asian country.
KOGAS and Energy Capital Vietnam propose to build a privately funded regasification terminal, storage, gas supply system, and 3,200 MW gas-fired power facility.
Under Vietnam’s gas industry development plan, Vietnam plans to have six LNG terminals by 2035, at a total cost of more than USD6 billion.
Since 2015, Energy Capital Vietnam has been in talks with the Vietnamese government regarding the privatisation of the Southeast Asian country’s energy sector. Energy Capital Vietnam engaged audit firm and consultancy KPMG to forecast electricity demand and known supply constraints in Vietnam as well as highlight the potential role LNG could play in meeting domestic energy needs and how the company could get involved in developing LNG import terminals there.
The World Bank estimated Vietnam’s electricity demand will grow by about 8% a year for the next decade and said it would need to invest USD150 billion by 2030 to develop its energy sector. Domestic oil and gas reserves are falling, and with coal-fired power projects behind schedule, LNG is seen as a good choice to plug the gap.
KOGAS, which has been procuring most of South Korea’s LNG supply for more than 30 years, has abundant experience in building and operating LNG regasification terminals and a distribution network for overseas and domestic markets.
Energy Capital Vietnam CEO David Lewis says that KOGAS’s strong presence in the LNG business together with the company’s position as one of the first LNG movers in Vietnam enables both companies to explore each other’s strengths to bring low-cost LNG to Vietnam.