Energy Capital Vietnam (ECV) has formed a joint venture with Gunvor International, one of the world’s leading independent energy commodities trading houses.
ECV is a US-based project holding and development company established in 2015 to serve as a platform for private investment into Vietnam. An ECV-led consortium is developing an LNG-to-power project in Mui Ke Ga, Binh Thuan province, in southeast Vietnam.
Under the terms of the partnership announced on December 8, ECV and Gunvor will form a JV for trading and shipping on behalf of ECV. In addition, Gunvor will supply LNG to the JV on a long-term basis.
The fully private, multi-phase power project will connect via subsea pipeline to an offshore floating storage and regasification unit (FSRU) to import LNG.
The first phase of the project is targeting a final investment decision in late 2021 and commercial operational delivery by 2025. The project will consume approximately 1.5 million tonnes per year of LNG, with an ability to increase consumption to reflect subsequent development phases and opportunities presented by market conditions.
“ECV is committed to providing Vietnam with energy security made possible through access to abundant US LNG, which will be supplied to our project in an economically efficient and sustainable manner by our JV with Gunvor,” ECV chairman and chief executive officer David Lewis said. “As the worldwide LNG market continues to mature – with increasing volumes and trading complexity – this innovative sourcing partnership will help optimize our fuel supply chain and streamline delivery logistics.”
Gunvor corporate affairs director Seth Thomas Pietras said: “Gunvor is pleased to partner with ECV on this LNG-to-power project in Vietnam, which will be among the country’s most strategically important LNG developments."
“The introduction of LNG to the region will initiate a much needed energy transition, and will help contribute to a significant reduction of greenhouse gas emissions,“ he added. "Binh Thuan province has been seeking a cleaner and more reliable energy source for many years, and the ECV project will also create technical and economic development opportunities for the local population.”
Swiss advisory firm Maius GmbH advised ECV on the structuring of its debt and equity, and risk mitigation of the project.
“Maius is pleased to have been able to apply their extensive relationships in the energy sphere to facilitate this agreement between these two companies, which will lead the way for LNG usage and power generation in developing countries in line with their environmental support efforts,” commented Maius CEO Stefan Rohmer.
In July ECV and Korea Gas Corp (Kogas) entered into a memorandum of understanding for the development of the Mui Ke Ga regasification terminal, storage, gas supply system, and a 3,200MW gas-fired power project. Phase 1 will be a 1,200MW facility.
Prime Minister Nguyen Xuan Phuc subsequently issued a directive adding the project to the National Power Development Plan of Vietnam.