KOGAS, Hanwha-led group to build Vietnam LNG power plant

Korea Gas Corp. (KOGAS) and Hanwha Energy Corp.-led group was set to build a $4.8 billion liquefied natural gas (LNG) power plant in Vietnam that is seeking more eco-friendly energy to meet growing domestic electricity demand.

A consortium led by KOGAS, Hanwha, Korea Southern Power Co. (KOSPO) and Vietnam’s T&T Group made an exclusive bid on Aug. 7 for a project to construct a 1,500 megawatts (MW) LNG power plant in Hai Lang District, Quang Tri Province, according to the industry sources on Sept. 5. The consortium is almost certain to win the order since it is in talks alone with the local government.

The project was to build the 2.5 trillion won ($2.2 billion) power plant for operations from 2028 in the first phase with an aim to expand its capacity to 4,500 MW at a total cost of 5.5 trillion won.

“We still need the final approval from the Vietnamese government,” said a source of the consortium. “Once the order is finalized, we will see other great opportunities such as exports of equipment and goods.”

LAND OF OPPORTUNITY

The consortium gathered the capabilities of each company for this project. KOGAS is one of the world best at the construction and operation of LNG terminals. KOGAS is already seeking to build another 3,600 MW LNG combined cycle power plant with Energy Capital Vietnam in Mui Ke Ga, Binh Thuan Province. KOSPO has ample know-how in the construction, operations and technical support of LNG power plants.

Hanwha, which stands out in the photovoltaic sector, developed the entire project based on its strong network in Vietnam. The company bought a 10% stake in the country’s energy company Bamboo Capital Group to secure a license for the solar energy business in June 2019.

Based on the Hai Lang project, the consortium aims to expand their presence in the market with strong growth potential. The country has been suffering from power shortage due to soaring demand amid rapid economic growth.

The government is aggressively expanding power facilities, looking for renewable energy such as solar and wind power. It aims to raise the total power generation capacity from 69.3 gigawatts (GW) in 2020 to 137.7 GW in 2030 and 233.8 GW in 2040 with 47.8 GW of LNG, 45.9 GW of wind power and 42.3 GW of solar power by then. The country is also actively converting power plant fuels from coal to LNG.

“Vietnam is a land of opportunity where the economy is growing 6% on average every year and electricity demand is surging,” said an industry source.

Write to Ji-Hoon Lee and Eui-Jin Jeong at lizi@hankyung.com
Jongwoo Cheon edited this article.