Energy: Liquified Natural Gas wins deal to supply Vietnam
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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.
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