Magnolia LNG Set to Fuel Vietnamese Power Plant
Australia’s Liquefied Natural Gas Limited (LNGL), the developer of the Magnolia LNG terminal in Louisiana, is set to supply gas to a LNG-to-power project in Vietnam.
LNGL has agreed to provide 2mn mt/yr of LNG to a 3.2-GW combined-cycle power plant to be built in Vietnam’s Bac Lieu province, it said in a statement on September 16. The generation project is led by locally-based Delta Offshore Energy (DeltaOE) and is due online in 2023.
Magnolia LNG is due to start up around the same time, provided LNGL takes a final investment decision (FID) as planned by the end of this year. The approval has repeatedly been delayed over concerns about where it will supply its production amid the ongoing trade dispute between the US and China.
“This agreement is a major achievement for the Magnolia LNG project as we progress our global commercial and marketing push toward a final investment decision,” LNGL CEO Greg Vesey said.
Magnolia LNG said it will ship LNG to the Vietnamese power station on a free-on-board basis under a minimum 20-year supply contract that still needs to be finalised. DeltaOE also needs to close a deal to sell the plant’s power to a local utility.
Vietnam does not yet import LNG, relying on a mix of domestic gas supply, which is in decline, as well as coal and hydropower to generate its electricity. But its gas-fired generation is expected to triple, which will require LNG.