Plans for the Bac Lieu liquified natural gas (LNG) power project have taken a step foward, with a high-level government working group in Bac Lieu province meeting to discuss the timeline of the signing of a long-term power purchase agreement.  

The Bac Lieu LNG power project is an important element of Vietnam's plans to increase its power generation capacity, underpinning economic growth not only for Bac Lieu and the Mekong Delta, but all of southern Vietnam.

The 3,200-megawatt (MW) project is being developed by Singapore‘s Delta Offshore Energy (DOE), which is negotiating a 25-year power purchase agreement with state-owned power utility Vietnam Electricity (EVN).

However, the project might have to look elsewhere for its LNG as DOE's provider recently went into adminstration, bringing into doubt whether it will press ahead with its plans to build its Magnolia LNG export terminal near Lake Charles, Louisiana. DOE has been negotiating a binding long-term purchase agreement for LNG exported from the Magnolia terminal.

In late May, DOE joined a government working meeting in Bac Lieu province, with a delegation of national stakeholder representatives from Hanoi led by Hoang Quoc Vuong, vice minister of  Industry and Trade and vice chairman of the National Steering Committee on Energy Development.

The purpose of the meeting was to discuss the project timelines, with a particular focus on completing the power purchase agreement (PPA), including its grid interconnections, by the end of this year. DOE says in a statement that it has presented updates and progress of the project and stressed the urgency of concluding the PPA discussions immediately to facilitate its signing by October.

The meeting concluded with the participants agreeing to fast-track key approvals and agreements of the concession.

The Government of Vietnam has requested that DOE submit its proposed PPA heads of terms agreement as soon as possible. This fast-track pilot model allows DOE to begin discussions directly with EVN.

Last December, the Vietnamese government approved the inclusion of the power plant in its official national  power development plan for 2011-2020. The plan encourages private sector investment in much-needed power generation projects.

The project will include supporting facilities: a floating LNG receiving facility, storage tanks, regasification terminal, and pipelines.

The plant will have four turbines of 750MW each and one with a capacity of 200MW, the former to go on stream at the end of 2023 and the latter in 2027.

The fast-growing economy of the Mekong Delta is attracting sizeable inflows of foreign direct investment, and the Bac Lieu project is the largest investment thus far.