US LNG Project Clear to Seal Vietnamese Supply Deal

The path is now clear for Australia’s LNGL to finalise a contract to ship gas from its Magnolia LNG export project in the US to Vietnam, the company said on December 27.

Earlier this month the Vietnamese government included a 3,200-MW gas-to-power project in the country’s southern Bac Lieu province in its 2011-2020 national electricity development plan. The project’s developer, Delta Offshore Energy (DeltaOE), wants to fuel the station with 2mn mt/yr of LNG from the Magnolia terminal, but still needs to finalise a sales and purchase agreement with LNGL for the supplies.

The project’s inclusion in Vietnam’s national plan means DeltaOE can now agree a contract for sell its power to local utility EVN, LNGL said, and in turn finalise arrangements for Magnolia LNG’s gas.

“We thank Prime Minister Phuc and members of his cabinet for their supportive efforts, and will immediately begin completing the terms of what will be the first long-term sale and purchase agreement for LNG to Vietnam,” LNGL CEO Greg Vesey said.

The four-train Magnolia LNG plant in Louisiana will be capable of exporting 8.8mn mt/yr of LNG. LNGC expects to take a final investment decision on its construction next year. Both the LNG terminal and the Vietnamese power plant are due on online in 2023.