Vietnam LNG Power Project Eyes Green Pivot on Soaring Gas Prices

Article content(Bloomberg) — Vingroup JSC has asked the Vietnamese government to allow it to replace a large liquefied natural gas power project with renewable energy, citing surging fuel prices linked to the Middle East conflict.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentThe rapid increase in LNG prices — due to war-driven supply disruptions in key exporter Qatar and intensifying competition among Asian buyers for limited supplies — has underscored significant risks for import-dependent projects like Vingroup’s proposed Haiphong LNG-to-power facility, it said in a letter seen by Bloomberg News. Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentThe company proposed shifting to a mix of solar and wind power paired with battery storage, according to the document, which was first reported by Reuters. The letter was addressed to the country’s trade minister and the head of the Electricity Authority. Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article content“In addition to cost factors, dependence on imported fuel also poses considerable challenges to energy security, supply autonomy, and Vietnam’s ability to control electricity generation costs,” Vingroup said in the letter. Article contentA representative of VinEnergo, the startup energy unit of Vingroup, declined to comment on the matter. The Vietnamese government did not immediately respond to requests for comment.Article contentThe proposed pivot comes as energy-importing nations grapple with surging prices due to the US-Israeli war against Tehran. Iran’s retaliatory strikes have knocked Qatar’s export plant offline and effectively halted shipping through the Strait of Hormuz, affecting 20% of global LNG supplies. Price-sensitive buyers, such as Vietnam, have been forced to scale back purchases as the fuel becomes increasingly expensive.Article contentArticle contentVingroup’s move also signals that the war is forcing many companies and countries to rethink their strategy of leaning into gas to transition toward cleaner energy. Vietnam had been actively expanding its LNG infrastructure to bolster energy security as it replaces coal-fired power. It is now fast-tracking its plan to develop green power.Article contentWhile a shift to renewables would reduce exposure to volatile fuel prices, Vingroup noted that upfront investment could be roughly five times higher than for an LNG plant. The company therefore asked the government to consider a pricing mechanism that would allow investors to recover costs, according to the letter.Article contentThe Haiphong project is planned to have a capacity of 4.8 gigawatts, with the first phase targeted for operation by 2030. Vingroup has already secured turbines for the initial tranche from GE Vernova Inc.Article content—With assistance from Sing Yee Ong, Nguyen Dieu Tu Uyen, Nguyen Xuan Quynh and Nguyen Kieu Giang.Article contentTrending Posthaste: Gold's fall from grace could be worse than markets expect News LNG Canada signs key pipeline agreement required for phase two expansion Energy Air Canada CEO likely sealed his own fate in failing to learn from first language misstep, governance experts say Airlines Subscriber only. Chinese are burying their dead in empty apartments rather than pay skyrocketing cemetery costs Subscriber only Financial Times Air Canada CEO to retire following English-only video controversy Airlines Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Posthaste: Gold's fall from grace could be worse than markets expect News LNG Canada signs key pipeline agreement required for phase two expansion Energy Air Canada CEO likely sealed his own fate in failing to learn from first language misstep, governance experts say Airlines Subscriber only. Chinese are burying their dead in empty apartments rather than pay skyrocketing cemetery costs Subscriber only Financial Times Air Canada CEO to retire following English-only video controversy Airlines