Delta Offshore Energy (DeltaOE) and Liquefied Natural Gas Limited (LNGL) have agreed to deliver an LNG-to-power project to the Bac Lieu province in Vietnam.
The DeltaOE-led power project includes the construction and operation of an LNG import terminal, 3,200-megawatt combined-cycle power plant, and delivery of power generation to the Bac Lieu province.
According to a joint statement by the companies, the integrated project is expected to begin operations in 2023.
LNGL’s wholly-owned subsidiary, Magnolia LNG, shall deliver 2 mtpa of LNG to DeltaOE under a supply and purchase agreement (SPA) on a free-on-board basis for a 20-year term with options to extend the term.
DeltaOE shall deliver gas to the power plant, generate electricity, and sell its output to the province. The two deals are linked on a back-to-back basis providing an integrated LNG-to-power solution for the Bac Lieu province.
Greg Vesey, managing director and CEO of LNG Limited, said: “This agreement is a major achievement for the Magnolia LNG project as we progress our global commercial and marketing push toward a final investment decision.
“This agreement represents a significant advancement of our long relationships held with DeltaOE, the province, and Vietnamese leadership, including our earlier hosting of the province leadership and DeltaOE at the Magnolia site.”
Bobby Quintos, engineering managing director for Delta OE, added: “Delta OE’s Bac Lieu project addresses Vietnam’s need for an LNG import terminal to provide access to growing the LNG industry as a feedstock for electricity generation.
“Our alliance with LNG Limited will allow the Government of Vietnam to have a stronger relationship with the U.S. market and the long-term stability of the Henry Hub Index, which fits perfectly with the Vietnamese National Power Development Plan.”