PV GAS Ink Supporting Vietnam's energy transition and economic growth in partnership with AES Vietnam

On 28 October 2020 in Hanoi, representatives of The AES Corporation (NYSE: AES) and Petrovietnam Gas JSC (PV Gas) signed a term sheet for the Joint Venture Agreement for the Son My LNG terminal, which will be located in Binh Thuan Province, in the South-Central region of Vietnam. The signing took place during the third annual Indo-Pacific Business Forum (IPBF), held on October 28 – 29 in Hanoi with the participation of H. E. Pham Binh Minh, Deputy Prime Minister, Minister of Foreign Affairs, H.E. Tran Tuan Anh, Minister of Industry and Trade, H.E. Daniel J. Kritenbrink, US Ambassador to Vietnam and other US and Vietnamese officials.

The Son My LNG terminal has an installed capacity of 450 TBtu and represents a total investment of about $1.4 billion. The terminal is expected to achieve financial completion in 2022 and begin commercial operations in 2025. 

The Son My LNG terminal complements AES’ investment in gas infrastructure around the country, with its previously announced $1.8 billion 2.2 GW combined cycle gas turbine (CCGT) power plant. Together, the plant and terminal will play a major role in shaping Vietnam’s energy future by diversifying the energy mix with imported LNG as well as meeting the country’s increasing demand for sustainable and affordable electricity.

“This is an important milestone for the development of the Son My LNG terminal and our CCGT power plant. With these two projects, AES is fully committed to the country’s growth in cleaner energy sources and offering the most reliable and affordable electricity to support the continued economic growth of Vietnam,” said David Stone, President of AES Vietnam. 

As part of the signing ceremony, AES also received a Letter of Interest from US’ Eximbank and US’ International Development Finance Corporation (DFC) to support the Son My LNG Terminal and Son My 2 CCGT projects with a loan amount of $3.2 billion. 

The AES Corporation is a Fortune 500 global power company and has extensive experience in developing LNG to power projects, including LNG terminals in the Dominican Republic in 2003 and in Panama in 2018, which have been providing a cleaner, more cost-effective and sustainable energy solutions for the Caribbean and Central America.

About LNG

Over the past 20 years, Vietnam has reached a remarkable GDP growth rate of between 6-7% per year. Meanwhile, electricity demand has increased over 10% between 2016 and 2020. Forecasts show that, from now to 2030, the Vietnamese economy will continue to grow at a high rate, at between 6.5-7.5% per year which leads to power demand growth of about 8.6% in the period of 2021-2025 and about 7.2% in the period of 2026-2030. Therefore, going forward, the country’s priority is to ensure sufficient energy supply for stable economic development.

The energy transition in Vietnam will have to focus not only on shifting from fossil fuels to renewables, but also to affordable, reliable, flexible, and resilient cleaner energy options and technology that would also contribute towards a post-pandemic economic recovery. Liquefied Natural Gas (LNG) thus has an essential role in improving energy supply security, reducing air pollution, and supporting the gradual transition towards a low carbon future in Vietnam.

Son My 2 BOT CCGT project and Son My LNG terminal project

With 15 years of operation in Vietnam, AES has positioned itself as a trusted and credible partner in the energy sector, combining our global resources and local expertise to provide safe, reliable and sustainable energy solutions.

In November 2019, AES signed a Memorandum of Understanding with the Ministry of Industry and Trade to develop the Son My 2 BOT CCGT power project with the capacity of about 2.2GW using imported LNG (Son My 2 BOT CCGT project). The Son My 2 BOT CCGT project complements AES’ investment plans in gas infrastructure in the country with its previously announced building the Son My LNG terminal project with a capacity of about 450 TBtu, which received approval from the Government of Vietnam in August 2019.

With total investment of $3.2 billion, the Son My 2 BOT CCGT project and the Son My LNG terminal project will provide significant investment in Binh Thuan Province and will enhance the local economy. By offering much cleaner alternative energy solutions, these two projects also help to address the power supply shortage in Southern Vietnam, while lowering the load on the region’s interconnected 500kV transmission lines, increasing power backup capability, as well as the reliability and stability of the system.

Together, these two projects will play a major role in shaping Vietnam’s energy future by diversifying the energy mix with imported LNG and help meet the country’s increasing demand for sustainable and affordable electricity.

“AES is committed to Vietnam’s economic growth and energy transition through the development of gas and renewable infrastructure,” said Andrés Gluski, AES President and Chief Executive Officer.

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