Malaysia’s Jaks Resources said it has signed a memorandum of understanding with T&T Group to work on LNG-to-power projects in Vietnam.
The duo signed the memorandum on September 11 and the deal is valid for 12 months, according to a filing to the stock exchange by Jaks Resources (JRB).
T&T is a Vietnamese investor and project developer in the energy sector, including LNG-to-power projects. JRB works in various fields but is also the developer and EPC contractor in coal-fired power plant projects in Vietnam’s Hai Doung province.
Quang Ninh 2 LNG-to-power project
“Recognizing the increasing demand for electricity in Vietnam, the increasing gas demand for gas-fired generation in Vietnam, and the required importation of LNG to meet this demand, both parties wish to explore the possibilities for cooperation in the development of Quang Ninh 2 (1500MW) LNG-to-power project in Quang Ninh province, Vietnam,” the filing said.
Under the non-binding deal, the duo plans to work on the LNG-to-power project’s implementation, formalize the agreed positions, and identify the most suitable location and technology for the import terminal and the power plant.
In addition, the partners will work on finding the LNG supplier and supplier of gas-fired power solutions as well as the designer of the power plant and any associated infrastructure, the filing said.
Investment, EPC, financing
According to the deal, T&T Group “shall be the investor who is responsible for legal matters of the project” while JRB “shall be the strategic investor of the LNG-to-power projects to be developed by T&T Group.”
Also, JRB would take the lead on the EPC process for the project to facilitate the
project’s design, engineering, construction, and operation.
The Malaysian firm would also work on financing supported by credit agencies for debt. It would also be responsible to identify “other international investors and companies that can assist in achieving the abovementioned goals,” the filing said.
After the duo agrees on the main parameters of the project, JRB said they would sign a separate agreement “stipulating the rights and obligations of all the entities taking part in the LNG-to-power project.”
Growing LNG-to-power market
Several players, including Delta Offshore, are planning to build LNG-to-power projects in Vietnam in order to meet the country’s growing power demand.
Russia’s Novatek also recently said it had established an office in Hanoi as it looks to supply LNG to Vietnam.
As per LNG import infrastructure, Vietnamese oil company Hai Linh has already completed the construction of its onshore LNG terminal in the southern province of Ba Ria-Vung Tau, according to GIIGNL data.
Vietnam’s first LNG receiving terminal will have an initial capacity of 2 to 3 mtpa, with the
potential to expand to 6 mtpa. It should start operations in 2021.
In addition, state-run PetroVietnam Gas and its partners have started building an onshore LNG receiving terminal at Thi Vai in the coastal area southeast of Ho Chi Minh City.
This facility will have a capacity of 1 mtpa in its first phase in 2022, while the partners plan to boost the capacity to 3 mtpa by 2023, GIIGNL’s data shows.