The Bac Lieu LNG-to-power project is an integrated two million tonne per annum (Mtpa) floating LNG import terminal and a 3.2GW combined-cycle power plant proposed to be developed in the Mekong Delta,  Bac Lieu, Vietnam.

Delta Offshore Energy (DeltaOE), a clean energy project development company based in Singapore, will lead the development and operation of the integrated facility, which is estimated to cost approximately £3.4bn ($4.3bn).

DeltaOE will purchase 2Mtpa of LNG from Magnolia LNG (MLNG), a subsidiary of Liquefied Natural Gas Limited (LNGL), which is developing an 8.8Mtpa LNG export terminal in Louisiana, US, supported by a 20-year sale and purchase agreement (SPA).

DeltaOE and LNGL jointly announced an agreement with the Bac Lieu Provincial Government of Vietnam to deliver the integrated LNG-to-power project in September 2019.

Expected to commence operations in 2023, the Bac Lieu LNG-to-power project will sell electricity to the Bac Lieu province, under a power purchase agreement (PPA) which is yet to be finalised.

Bac Lieu LNG-to-power project background

To ensure its energy security, the Government of Vietnam has started attracting foreign investors for critical energy infrastructures such as integrated LNG-to-power facilities since 2018.

The People's Committee of the Bac Lieu Province signed a memorandum of understanding (MoU) with Energy Capital Vietnam (ECV), a Vietnam-focused project development and asset management company based in the US, to invest in an integrated LNG-to-power project in May 2018.

It was followed by the signing of an MoU between the Bac Lieu Province People’s Committee and DeltaOE for the Bac Lieu LNG-to-power project in July 2018.

ECV entered an MoU with Korea Gas Corporation (KOGAS) for developing a similar 3.2GW integrated LNG-to-power project in Mui Ke Ga, Binh Thuan Province, in July 2019, while DeltaOE and LNGL entered the agreement for the Bac Lieu LNG-to-power project in September 2019.

Bac Lieu LNG-to-power project details

The Bac Lieu LNG-to-power project will be located in the Hoa Binh district of the Bac Lieu province of Vietnam. It will encompass a total area of approximately 140ha, of which 40ha will be land and the remaining 100ha will be sea surface area.

The integrated facility will comprise a floating storage and regasification unit (FSRU) and a 3.2GW combined-cycle gas turbine (CCGT) power plant onshore.

The floating LNG import and regasification terminal will supply feed gas for the power plant through a gas pipeline connecting both the facilities.

The gas-fired power plant is proposed to be developed in three phases, with phase one having 1GW installed capacity, which is expected to be commissioned in 2023. The plant is expected to achieve its full capacity in 2027.

Magnolia LNG project details

The Magnolia LNG project involves the development of an 8.8Mtpa capacity LNG export terminal at the Port of Lake Charles, Louisiana, US.Encompassing a total area of 46.5ha (115 acres), the Magnolia LNG export terminal will comprise four liquefaction trains, each capable of processing more than 2.2 million tonnes of natural gas a year.

MLNG, a subsidiary of LNGL, will own and operate the Magnolia LNG terminal.

The US Federal Energy Regulatory Commission (FERC) granted approval for the project in April 2016.

The US Department of Energy (DOE) approved LNG export from Magnolia LNG terminal to the US’s non-free trade agreement (FTA) countries in November 2016.

KSJV, a joint venture between KBR (70%) and SK Engineering and Construction (30%), will develop the Magnolia LNG project under a turnkey engineering, procurement and construction (EPC) contract awarded in November 2015.