LNG TRADE IN VIETNAM

07/12/2024

What is LNG?

Liquefied Natural Gas (LNG) is natural gas (mainly composed of CH4 - Methane 94.3% and a small amount of C2H6) that has been cooled to -162°C to become liquid. This cooling process reduces the volume by 600 times, making LNG much easier to store and transport.

LNG Trade in the World

Globally, LNG has become a significant energy source and is widely traded. Top LNG exporting countries include Australia, the United States, Qatar, and Russia. Australia is the largest LNG exporter with a production of 80.9 million tons in 2022. The United States and Qatar are also major LNG producers with production of 80.5 million tons and 80.1 million tons respectively (PetroTimes). In 2023, global LNG trade grew by approximately 3.1%, averaging 52.9 billion cubic feet per day (GIIGNL).

*LNG Terminal - Thuan Dao Industrial Zone - Long An*

LNG TRADE IN VIETNAM RECENTLY

1. Infrastructure:

Vietnam is investing in building ports and infrastructure to receive and distribute LNG, aiming to enhance the use of this energy source in the future. Among them, Thi Vai Port is the first and largest LNG terminal, with a capacity of 1 million tons per year in the first phase and plans to expand to 3-6 million tons in the future.

2. Market:

In Vietnam, LNG is primarily used as fuel for power plants and industrial production. Some notable LNG-powered power plants include:

- Nhon Trach 3 and 4 Power Plants: Currently under construction and expected to be completed in the next few years.

- Quang Ninh LNG Power Plant: This project has a capacity of 1,500 MW and is one of the major projects in northern Vietnam.

- Nghi Son LNG Power Plant: This project has a capacity of 2,250 MW and is one of the major projects in central Vietnam.

- Other projects.

For industrial production, LNG is expected to be transported by specialized vehicles in the southern region. In central and northern Vietnam, LNG will be loaded into ISO Tanks and transported by rail or sea.

LNG Supply Chain: https://www.youtube.com/watch?v=CVRSrrG-Apk&ab_channel=DATAEnergy

LNG demand in Vietnam is projected to increase by an average of 12% annually and could triple by the mid-2030s, aligning with the Vietnamese government's target of importing 8 billion m³ of LNG per year by 2030 (PetroTimes).

3. Potential:

The use of LNG in Vietnam currently requires a large quantity due to the high investment cost of the system. However, LNG is still considered a potential energy source with strong development potential in the future thanks to the clear development strategy of the Vietnamese government. In particular, LNG gas power plants and LNG storage facilities are being invested and developed.

4. Price:

In Vietnam today, LNG is not yet widely used and there is no specific selling price mechanism. The price of imported LNG into Vietnam can range from 10-12 USD/million BTU (VnExpress) excluding storage, regasification and transportation costs. However, the price of LNG can fluctuate depending on the import price of LNG, taxes, and related costs.