Delta plans to start building Bac Lieu LNG-to-power project in 2024

Delta Offshore Energy (DOE) plans to start building its Bac Lieu LNG-to-power project in 2024 following the recent approval of the Power Development Plan 8.

Vietnam approved the development plan on May 15 for the 2021 – 2030 period with vision to 2050.

DOE is the developer of the integrated 3200MW LNG-to-power project in Bac Lieu province, Vietnam approved under Power Development Plan 7 (Revised) in late 2019.

According to a statement by the firm, PDP8 includes the approval of the grid interconnection plan for the project to connect to the existing 500kV national grid backbone linked to the power load system of Ho Chi Minh City.

This will allow the project to supply power to foster economic development in the region as well as support more efficient use of the existing and proposed wind and solar renewable energy projects in Bac Lieu province and the Mekong Delta, DOE said.

Study

The 500kV 130km Bac Lieu – Thot Not transmission line now approved in PDP8 will be a project of the national government and Electricity Vietnam (EVN).

To support and accelerate the process, DOE was able to obtain funding from the United States Trade & Development Agency (USTDA) of the United States Department of Commerce (DOC) to fund an international feasibility study of that transmission line.

Moreover, that international feasibility study is being finalized now and has been prepared by Black & Veatch to comply with international financing standards and supported by the Vietnamese Institute of Energy to comply with local requirements, DOE said.

With this international feasibility study complete, the transmission line can proceed to financing and construction, it said.

Power purchase deal and start of construction

Ian Nguyen, managing director of DOE, welcomed the approval of PDP8, as it provides a “clear path to the completion of the grid interconnection which is critical for DOE and EVN to complete agreement on the tariff and schedule of the PPA.”

“We target completion of the PPA in 4th quarter of 2023 in order to break ground in 2024,” he said.

The power purchase agreement has been in negotiations since the end of 2020 and the key legal and commercial provisions of the PPA have been addressed including the fuel cost pass through based on long-term LNG supply terms.

Roberto Mayo Quintos, managing director of DOE, said that the firm undertook a long-term LNG supply tender in late 2020-2021 achieving “tremendous success having received nearly thirty bids from leading LNG suppliers.”

He said that this transparent procurement process provides a “strong model to ensure best pricing on the fuel cost pass through to EVN and ultimately Vietnam.”

“Long-term LNG contracts mitigate volatility in fuel pricing while ensuing security of supply to maintain reliable power generation to address Vietnam’s fast growing power demand,” Quintos said.

Bechtel, Stena

Back in 2021, US engineering and construction giant Bechtel secured a front-end engineering design contract from DOE to provide services for the combined cycle gas turbine power plant in the Bac Lieu province.

The plant consists of four single shaft units of H class gas turbine technology.

In addition, DOE awarded a contract to a unit of Sweden’s Stena for the jetty-less floating terminal.

Stena Power & LNG Solutions completed model testing of its technology, including a regas platform and a floating storage unit, for the Delta Offshore Energy LNG-to-power project in 2021.

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