The signing ceremony between PetroVietnam and EVN on Friday. — Photo courtesy of PetroVietnam

Vietnam Oil and Gas Group (Petrovietnam) on Friday signed a power purchasing agreement (PPA) for Nhơn Trạch 3 and 4 power plant project and a memorandum of understanding to supply liquified natural gas (LNG) for Quảng Trạch 2 with Vietnam Electricity (EVN), paying the way for the development of gas-fired power.

Nhơn Trạch 3 and 4, located in Nhơn Trạch District, Đồng Nai Province, is the first LNG-fired power plant in Việt Nam with an investment of US$1.4 billion and a capacity of 1,624 MW. Developed by PV Power, a member of PetroVietnam, the plant is expected to add more than 9 billion kWh per year to the national power system.

The signing of PPA which has been under negotiation since 2019 is a critical factor for the efficient implementation of the project towards commercial operation. With PPA, PV Power can early sign the gas sales agreement (GSA) for stable gas delivery plan and reasonable price. PPA is also a prerequisite when international credit institutions consider providing capital to PV Power.

PPA of Nhơn Trạch 3 and 4 will also pay the way for the negotiations of PPAs for other LNG power plans under the eighth national power development plan (PDP8).

Under PDP8, gas-fired power will total 37,00 MW by 2030, equivalent to nearly a fourth of the total capacity of the power system and account for the highest proportion in the power source structure. Việt Nam has identified LNG power a priority.

On the same day, Petrovietnam and EVN also signed a memorandum of understanding on the supply of LGN from LNG Vũng Áng power station to LNG Quảng Trạch 2.

Quảng Trạch 2, developed by EVN, is approved to switch from coal-fired to LNG-fired with a capacity of 1,200-1,500 MW.

The signing of these agreements are first steps towards promoting gas-fired power, ensuring the national energy security and accelerating energy transition to achieve Net Zero by 2050, Petrovietnam said. — VNS