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Chan May LNG power project to receive the investment up to $6 billion

12:26 | 24/07/2020

Chan May LNG, a U.S.-Vietnamese joint venture, plans to invest up to $6 billion in a power project in Vietnam as it seeks to cash in on the Southeast Asian country’s rising demand for electricity, its chief executive officer said on Wednesday.

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According to Reuters, Vietnam faces the risk of severe power shortages from 2021 as demand outpaces construction of new plants.Chan May LNG, a U.S.-Vietnamese joint venture, plans to invest up to $6 billion in a power project in Vietnam as it seeks to cash in on the Southeast Asian country’s rising demand for electricity, its chief executive officer said on Wednesday (July 22).

The project in Thua Thien Hue province will include a 4-gigawatt power plant, an LNG terminal and storage facilities, John Rockhold told Reuters on the sidelines of the Vietnam Energy Summit 2020 organized in Hanoi on July 22.

Construction of the power plant is scheduled to begin next year, so that the first phase of 2.4 GW will be operational from 2024 and the entire plant from 2027, Rockhold said.

“We have big support from the U.S. government for the project, as they have LNG to sell,” he said. “We have a number of U.S. LNG suppliers and we are doing the shopping right now”.

chan may lng power project to receive the investment up to 6 billion
Wind turbines at a farm in Ninh Thuân Province. Photo: Dang Quoc Bao/VNS

When fully operational, the project will import around $1.2 billion worth of U.S. LNG a year, he said, adding it would help narrow the trade deficit the U.S. has incurred with Vietnam.

Vietnam has been seeking to import more U.S. goods, such as coal and LNG, to narrow the trade gap after President Donald Trump threatened tariffs on its products amid the Chinese-U.S. trade war.

Chan May LNG, which is 60% owned by U.S. investors and 40% by Vietnamese investors, said a number of institutions had shown interest in financing the projects, including U.S. Exim Bank, the U.S. International Development Finance Corp. and the International Finance Corp.

Rockhold said the plant will use turbines from General Electric.

Rockhold said that the project has been submitted to Vietnamese Government with the expectation of receiving official approval this year 2020.

chan may lng power project to receive the investment up to 6 billion
A look of Chan May Port, which is part of the Chan May-Lang Co Economic Zone. Photo: VNS

According to Nhan Dan Newspaper, the total foreign direct investment (FDI) into Vietnam between the beginning of this year and June 20 reached US$15.67 billion, equivalent to 84.9% of the figure for same period last year, according to the Ministry of Planning and Investment.

There were 1,418 newly licenced projects during the Jan-June period, with registered capital of US$8.44 billion. There were 526 licenced projects from previous years registered as having adjusted their investment capital with additional capital of US$3.7 billion, up 26.8%.

During the six-month period, 4,125 foreign investors contributed capital and purchased shares with a total value of nearly US$3.51 billion, up 2.6%.

During the period, the processing and manufacturing industry witnessed the largest volume of newly licenced FDI projects, reaching US$8 billion, accounting for 51.1% of total newly registered capital. It was followed by the production and distribution of electricity, with US$3.95 billion, accounting for 25.2%; wholesale and retail (US$1.08 billion); and real estate (US$850 million).

Among the 98 countries and territories registering new projects in Vietnam in the first six months, Singapore was the largest investor, with US$5.44 billion, accounting for 34.7% of the total, followed by Thailand with US$1.58 billion (10.1%), China with US$1.58 million (10.1%) and then Japan, the Republic of Korea, and Taiwan (China).

Among the 57 localities receiving FDI in the six-month period, the southern province of Bac Lieu ranked top with US$4 billion. Ho Chi Minh City came next with over US$2 billion and Ba Ria - Vung Tau placed third with US$1.95 billion, followed by the capital Hanoi, Binh Duong province and Hai Phong city.

chan may lng power project to receive the investment up to 6 billion
Workers at an electronic spare parts manufacturing company. Photo: VNA
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Reuters, Nhan Dan