One of the greatest challenges facing the development of liquefied natural gas (LNG) power is the shortage of domestic sources and increased dependence on imported sources, analysts told the LNG Development in Vietnam: Opportunities and Challenges workshop on January 24 in Hanoi.

Over recent years, the workshop heard, as climate change clearly affects the living environment, attention has been paid to minimizing sources of pollution emissions, including limiting the use of traditional fossil fuels like coal and crude oil.

People hope to use fuels that are more durable, cleaner, and cause less pollution in the environment. The introduction and development of LNG in Vietnam has offered and continues to offer many opportunities for the domestic energy industry, but there remain many difficulties and obstacles in turning these into reality.

The country currently has 13 LNG projects approved by the Prime Minister on a list of important projects and investment priorities for the power industry in Decision No. 500/QD-TTg. Five of these 13 projects are being implemented, four have found investors, and the remaining four are conducting investor selection.

In particular, the Nhon Trach 3 and 4 LNG projects in Nhon Trach district, southern Dong Nai province, are key national projects under National Power Plan VII (PDP7), assigned by the government to PV Power as the investor, with a capacity of 1,500 MW and total capital of $1.4 billion. This is also the first LNG power project in Vietnam, and is expected to be put into operation in 2024-2025.

According to calculations, it takes over eight years to implement a single LNG project. Thus, it will be difficult to complete the plan to build 13 LNG power plants by 2030.

Mr. Nguyen Quoc Thap, Chairman of the Vietnam Petroleum Association (VINPA), said that, currently, the electricity consumption market is growing slowly compared to the target under electricity plans. “There is still no legal framework to complete negotiations and sign agreements between entities in the LNG power project chain,” he added. “Another difficulty is that the issue of promulgating a power generation price framework for LNG power plants is still being researched and considered.”

Economist Vu Dinh Anh also highlighted the barriers in terms of mechanisms and price in developing LNG power. He emphasized that Vietnam is yet to have specific mechanisms or regulations for its development.

“Vietnam also lacks regulations or standards in building warehouses and importing LNG,” Mr. Anh added. “Construction of an LNG power plant requires being near the location of an LNG import terminal, while LNG warehouses must be near a deep-water port that can berth large tonnage vessels.”

Analysts believe that to attract private investment in gas power development in Vietnam, it is necessary to synchronously implement solutions to improve the legal framework, publicize energy plans, and focus on other related issues to create an attractive investment environment and an open, transparent, and fair policy mechanisms to encourage businesses to invest.

It also is necessary to boost professional training and skills at ministries, branches, and localities in the appraisal and negotiation of public-private partnership (PPP) project contracts, and to restructure, innovate, and improve the operational efficiency of State-owned enterprises in the energy sector.

In addition, information, propaganda, and investment promotion work needs to be carried out effectively and investment support services, consulting, and judicial support developed, along with other solutions aimed at helping investors obtain information, follow the law, make informed decisions, and implement projects.