Last week, AES Corp (AES) won Vietnamese regulators’ approval to build a 2.2-gigawatt natural gas-fired power plant in the south-central province of Binh Thuan. Slated for service in 2024 under a 20-year government contract, it will be fueled by the company’s 450 Tera BTU capacity LNG import and storage terminal, which enters service in 2022. Forbes reported.
The same day, Vietnam’s Minister of Industry and Trade Mr. Tran Tuan Anh was guest of honor at an event hosted by the US-Asia Institute in Washington D.C. The subject: Similar blockbuster opportunities for US energy companies, as the southeast Asian nation electrifies its rapidly growing economy while controlling environmental risks.
Vietnam has historically relied heavily on locally mined coal in its power mix. But as new facilities take the fuel from 49 percent to 55 percent of generation by 2025, projected annual output of 51 to 54 million tons won’t cover the 65 to 70 million tons needed by power plants.
Australian coal companies’ close proximity ensures they’ll get most of the resulting export business. To the extent US miners participate, it won’t offset rapidly falling demand at home. In the past month, Foresight Energy LP (FELP) and privately held Murray Energy have skipped bond interest payments, putting them in line to join the dozen other US coal miners to go bankrupt this decade. Coal’s share of US power is now under 25 percent, from nearly 50 percent a decade ago.
But while Vietnamese demand won’t save US coal, the country offers a massive opportunity for North American natural gas producers, power generators and LNG transportation and infrastructure. Starting from zero, the country expects to ramp up LNG imports to 10 million tons by 2030, while natural gas generating capacity more than doubles from 9 to 19 GW by 2030.