Liquified Natural Gas (ASX: LNG) has announced an alliance with Delta OffShore Energy to supply LNG to Vietnam.

LNG subsidiary Magnolia LNG will deliver 2 million tonnes of LNG to Delta and Delta will deliver it to Vietnamese province Bac Lieu via a new 3,200 megawatt combined cycle power plant being constructed.

The project will start in 2023 pending government approvals and the agreement will last for 20 years with options to extend.

While Vietnam’s gas industry has so far been self-sufficient, according to market intelligence firm Fitch Solutions, this is expected to come to an end in 2022.

This is forcing the country to turn to LNG.

The new plant being built under the alliance, by Samsung, will sit just south of Ho Chi Minh City.

The Vietnamese government previously flagged a gas industry development plan that outlines the need for at least six operational LNG terminals by 2035.

“Delta’s Offshore Energy’s Bac Lieu project addresses Vietnam’s need for an LNG import terminal to provide access to growing the LNG industry as a feedstock for energy generation,” Delta engineering managing director Bobby Quintos said.

“Our alliance with LNG Limited will allow the government of Vietnam to have a stronger relationship with the US market and the long-term stability of the Henry Hub Index, which fits perfectly with the Vietnamese National Power Development plan’.

Shares climbed 25 per cent this morning to 30.5c.

In other ASX energy news today:

Oil prices surged over the weekend after an Iranian attack on Saudi Arabian facilities, which led to a production cut of 5.7 million barrels per day. However, the only ASX small cap oil stocks that jumped were those with company specific news.

Winchester Energy (ASX:WEL) reported oil was currently flowing at Arledge 16#2 at a rate of 250 barrels per day. It estimates that 80 per cent of load water is yet to be recovered and it is currently evaluating pay zones to see which ones have potential for further production. Winchester also reported that its White Hat 20#5 well was fracture stimulated last Thursday and was currently being swabbed. It reported an oil cut had been observed and was increasing, consistent with previous wells in the Mustang oil field. The company climbed 10 per cent today.

Elixir Energy (ASX:EXR) has completed a survey on its coal seam gas field in Mongolia. It will process the data within the next six weeks and drilling remains on schedule. Managing director Neil Young said the program was going according to plan and the CSG drilling would be the most technically advanced ever conducted in Mongolia. Elixir jumped 4 per cent this morning.

The West Erregulla well, co-owned by Strike Energy (ASX:STX) and Warrego Energy (ASX:WGO), has had the final casing string run and cemented in place. The casing was set at 5,090m. Strike told shareholders it was preparing to perforate the well across the Kingia interval before running the completion assembly and the 3-1/2 tubing string. Flow tests are now being planned and prepared for. Warrego also announced this morning that it had raised $12m. The company climbed 11 per cent to 34 cents while Strike rose 2 per cent. In 2019 these stocks are up 560 per cent and 229 per cent respectively.

At Stockhead we tell it like it is. While Winchester Energy and Warrego Energy are Stockhead advertisers they did not sponsor this article.

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