Thi Vai Terminal, an LNG storage facility in the southern province of Ba Ria-Vung Tau. (Photo: VNA)

The Cai Mep liquefied natural gas (LNG) terminal is currently seeking cargo to begin commissioning tests, setting it on track to become the country’s second terminal to import the fuel, according to a Reuters report in late August.

“Having just received the import licence, we are now working to accelerate the commissioning process, targeting completion within the next three months,” said Karthik Sathyamoorthy, CEO of AG&P LNG. “We plan to secure the commissioning cargo in October for delivery between late October and mid-November.”

In June, US-based LNG company Excelerate Energy signed a term sheet with Vietnam’s ITECO JSC to co-develop a greenfield LNG import terminal in the northern port city of Haiphong.

“As one of the fastest-growing economies in Asia, Vietnam remains a highly attractive emerging market for foreign investment,” said Ramon Wangdi, vice president of Excelerate in Asia-Pacific. “This growth is driven by a rapid increase in energy demand, where LNG will play a pivotal role over the coming decades. As Vietnam transitions from carbon-intensive fuels such as coal and oil while incorporating intermittent renewables like solar and hydro, LNG will be crucial on the path to achieving net-zero by 2050.”

Excelerate, a US company with a global footprint, is exploring opportunities to fund related infrastructure across Vietnam and the Asia-Pacific, aligning with this shift in energy strategy.

“Vietnam has ambitious plans to expand its LNG-based power programme from virtually zero to over 20GW by 2045, requiring more than 20 million tonnes of the gas per annum,” Wangdi said.

“Given the country’s unique geography, with a long coastline and onshore terrain that complicates the development of a nationwide gas pipeline system, infrastructure for receiving, processing, and distributing LNG will need to be built nationwide. This will connect import terminals to a range of end users, from power generation to industrial and commercial sectors.”

Such investments must be reliable, cost-effective, and quickly deployable. Wangdi added that, like Excelerate, other top-tier companies will have opportunities to invest in this emerging industry, spanning the entire gas and LNG value chain.

Meanwhile, Son My Terminal, a joint venture between AES and PetroVietnam Gas (PV Gas), was approved by Binh Thuan People’s Committee in July 2023. The terminal is expected to begin commercial operations in 2027.

Adam Sitkoff, executive director of the American Chamber of Commerce in Vietnam in Hanoi, said American companies are global leaders in the energy sector, and they are excited about opportunities in projects here, especially in LNG infrastructure.

“However, to translate this interest into real investments, Vietnam must demonstrate to international financiers that large-scale infrastructure can be executed in a way that meets international banking standards. It’s crucial that LNG terminals and all off-takers progress along the same development timeline to unlock international funding,” he said.

The Power Development Plan VIII (PDP8) and bilateral agreements reflect the close partnership between the governments of Vietnam and the US in promoting energy cooperation. This partnership provides a foundation of trust for the US business community to invest in multi-billion-dollar LNG projects in Vietnam, Sitkoff added.

“Significant infrastructure investments will soon be required to enable LNG imports, including import and storage facilities. American companies can leverage their advanced technology and expertise to build and operate these facilities, ensuring efficient and reliable supply chains. We look forward to several major infrastructure projects, including the Son My terminal and Son My 2 CCGT, along with PV Gas’s newly commissioned Thi Vai terminal,” he said.

According to FiinGroup, Vietnam’s first step into related infrastructure development began with PV Gas’s inauguration of the country’s first commercial LNG terminal in late 2023. Among the 13 LNG power plants with a combined capacity of 24GW approved under the PDP8, only two – the Nhon Trach 3 and 4 and Hiep Phuoc – are currently under construction. The remaining 11 are in the planning phase, with three still seeking potential investors.

Additionally, several commercial terminals, including PV Gas’s Thi Vai and AG&P’s Hai Linh, are either operational or under construction. These terminals are intended for both thermal power plants and local industrial customers.

Anh Nguyen, manager of Market Research and Consulting at FiinGroup, said, “LNG is set to become a promising sector in Vietnam in the coming years. The PDP8 is focused on transitioning away from traditional energy sources like coal and hydro by reducing their share in the country’s power generation. The plan targets a 14.9 per cent contribution from LNG to Vietnam’s power supply.”

Meanwhile, the Ministry of Industry and Trade introduced new power purchase agreement guidelines in 2024, removing key barriers for the development of LNG and natural gas infrastructure, such as the O Mon power plant. These guidelines offer investors and Vietnam Electricity a clearer path to reaching agreements efficiently.

“There is strong interest from experienced foreign investors. Prominent international players like ExxonMobil, Siemens Energy, General Electric, and Millennium Energy are eager to carry out activities in this sector. Their proven track records in LNG development and robust financial capabilities position them well to make significant contributions to power plants in the country,” Nguyen said.

Despite its bright outlook, Vietnam’s LNG industry faces considerable short-term challenges. As such development is a conditional business, requiring multiple permits and licences, the lengthy approval process often delays project timelines and complicates investment.

“Due to the lack of clear guidelines on output guarantees, many domestic investors face difficulties securing funding and developing financial schemes. As a result, 11 related projects remain in the planning stage,” Nguyen said.