Novatek Signs Up for Vietnamese LNG-Fired Power Project

Novatek announced June 7 that it has signed a memorandum of understanding (MOU) to co-operate in the development of a gas-fired power plant in Vietnam that will use LNG.

The Russian independent will work alongside French Total, state-controlled compatriot oil company Zarubezhneft and Germany’s Siemens on an “integrated energy-generating project with the use of liquefied natural gas (LNG) within the Socialist Republic of Vietnam,” it said in a statement.

“The Vietnamese market is of great interest to us as the country’s economy and demand for electricity is forecast to grow at a fast pace creating favorable conditions for gas-fired power generation and LNG supplies,” noted Novatek chairman Leonid Mikhelson. “Many years of experience of Zarubezhneft in Vietnam will contribute to the successful implementation of our strategic plans in this prospective market.”

State-owned PetroVietnam signed off on a 30-year production sharing agreement with Zarubezhneft on the offshore Block 16-1/15 in May.

Novatek did not offer any detail on the project, which has the same partners as another Vietnamese memorandum announced late in May.

There is a a flurry of interest among foreign investors in LNG-fired power projects in Vietnam, which has fallen behind in developing its energy sector as coal and oil projects have lagged. Several projects to develop LNG terminals are in the planning stages.

Gazprom signed MOUs in 2016 over exploring the possibility of using gas from joint projects offshore Vietnam, as well as Gazprom's LNG, for power generation. More recently, The US Trade and Development Agency (USTDA) and Vietnam Electricity (EVN) signed a grant agreement for a technical assistance for a LNG terminal and gas-to-power project for Vietnam's southern region.