Energy-thirsty Vietnam, which is promoting decarbonization in its export-driven economy, is stepping up the implementation of gas-to-power projects nationwide.

Vietnamese Prime Minister Pham Minh Chinh has urged state-run PetroVietnam, the country’s oil, gas and power group, to use all resources possible so that the country’s first LNG-fired power plant – Nhon Trach 3 near Ho Chi Minh City – can start commercial operations this July.

On February 5, PetroVietnam Power ( PV Power ) integrated the facility into the national grid. This follows a US$521.5 million loan announced in September 2024 from Citi and ING Germany for PV Power’s Nhon Trach 3 and 4, Vietnam’s first two LNG-to-electricity plants.

In the deal, export credit agency ( ECA ) cover was provided by Korea Trade Insurance Corporation ( K-Sure ) and Swiss Export Risk Insurance ( SERV ).

Set for commercial operations

The two plants are expected to add 1,624 megawatts of capacity to Vietnam’s electricity network. According to PV Power, Nhon Trach 3 will initially provide 50MW to the national grid. Nhon Trach 4 is set to begin commercial operations this October.

Located in the Nhon Trach District of Dong Nai province bordering Ho Chi Minh City, the two projects need a total investment of almost US$1.4 billion. In addition to Citi and ING Germany, funding also came from Japanese bank SMBC and Vietnamese lender Vietcombank.

The Thi Vai LNG terminal complex in Ba Ria-Vung Tau next to Dong Nai province will supply the LNG for the two plants. Operated by PetroVietnam subsidiary PV Gas, the complex is Vietnam’s unique operational LNG terminal to date, and imports all LNG, mostly from the United States, as Vietnam cannot produce LNG yet.

Aside from the two power plants, the Vietnamese prime minister urged that obstacles in the Blue Whale ( Ca Voi Xanh ) gas-to-power project in the central Vietnamese waters be removed to implement the project, the largest of its kind in the country. The partners in the production sharing contract for blocks 117–119 holding the Blue Whale gas field include US major ExxonMobil and PetroVietnam Exploration Production Corp.

Blue Whale was found to hold “a significant quantity of natural gas” by developers in 2011. As originally planned, the gas from the field would power the Dung Quat Power Complex in the central province of Quang Ngai, home to the PetroVietnam-invested Dung Quat oil refinery.

As designed, the power complex would have three combined-cycle gas turbine power plants, each with a capacity of about 750MW.

Sembcorp, EVN projects

Singapore-based industrial conglomerate Sembcorp is in charge of one of the three, while Vietnamese state-run utility Vietnam Electricity ( EVN ) is the developer of the other two. Both majors, however, are still waiting for gas exploration results from Blue Whale as the timeline of gas supplied from the project is not available to date.

Under Power Development Plan 8 ( PDP 8 ), Vietnam’s current master power plan, five combined-cycle gas turbine power plants of 750MW each would be fuelled by gas from the Blue Whale gas field, namely Dung Quat 1, Dung Quat 2, Dung Quat 3, Mien Trung 1, and Mien Trung 2.

As the investor of Dung Quat 2, which requires US$793 million in capital, Sembcorp had its feasibility study report approved in 2018. The project is now progressing towards the signing of a build-operate-transfer contract, according to Vietnam’s Ministry of Trade.

Vietnam Electricity has not submitted its Dung Quat 2 and 3 feasibility study reports for approval. The state utility is also in charge of the two added plants, Mien Trung 1 and 2, but little progress has been made so far.

In line with Vietnam’s energy transition efforts, PDP 8 puts the brakes on coal-fired power generation while promoting gas-fired sources, renewables and waste-to-energy facilities. Also this year, Vietnam will start to buy wind power from neighbouring Laos.