HANOI- Vietnam received its first shipment of liquefied natural gas this month, a milestone for the energy-hungry country, but various hurdles mean it could take years for imported gas to ease the country’s long-running power shortages.
Disagreement over pricing, plant construction delays and lack of supply contracts are dogging the Southeast Asian manufacturing hub’s adoption of LNG, hampering its ambitions to make imported gas a major fuel, industry insiders say.
Vietnam’s urgent need to boost electricity supply, laid bare by recent rolling blackouts, has raised concerns among foreign investors about whether Vietnam can remain a reliable option to diversify manufacturing away from China.
Half the businesses in a June poll by the European Chamber of Commerce in Vietnam said the power crisis had hurt investment plans. Some were considering alternatives or pausing spending on factories.
Failure to execute on its LNG plans would mark another blow to Hanoi’s climate goals, which include imported and domestic gas as a transition fuel to reduce coal reliance.
With demand forecast to grow 6 percent annually for the rest of the decade, Vietnam in May unveiled a $135 billion electricity roadmap that, among other investments, would add 13 power plants fed by gas imported as LNG by 2030.
Integrating LNG into its fuel mix, Vietnam would join neighbors Thailand and Singapore as well as the Philippines, a recent-adopter.
Vietnam’s industry ministry did not respond to a request for comment on implementing its LNG plan.
The first LNG shipment reached Vietnam last week. The test cargo of super-chilled gas was sent to state-owned PetroVietnam Gas’s (PV Gas) new Thi Vai terminal near Ho Chi Minh City for conversion back to gas.
Vietnam targets LNG-sourced gas generating up to 22.4 gigawatts (GW) of power by 2030, enough to power 20 million households and account for nearly 15 percent of national power supply. But Kaushal Ramesh, an analyst at Oslo-based Rystad Energy, said a realistic expectation was just 5 GW.
Complicating LNG efforts, much of Vietnam’s planned gas power investment is directed to the south of the country despite the under-served north’s greater vulnerability to blackouts. – Reuters
