(Courtesy photos: Media V News Vietnam)
Hanoi, Vietnam. October 12, 2020 — A significant milestone has been reached in the development of a USD 4 billion investment 3200 MW power plant in Bac Lieu Province, Vietnam which is the country’s largest Foreign Direct Investment (FDI) project in 2020 as well as the largest ever in history of the Mekong Delta. This High Profile Investment Event highlights the rapid advancement occurring on this reliable, sustainable, and affordable clean energy project under an innovative new model governed by Vietnam’s Law on Investment with the strong support from both the central government and local authorities. The project is the first fully private and foreign-owned LNG-to-power project in Vietnam.
Hosted by the Bac Lieu People’s Provincial Committee (BLPC), Delta Offshore Energy (DOE) and strategic partners of the world-class consortium was held both in-person and virtually. This Memorandum of Understanding (MoU) signing event included the support of The U.S. Consul General Marie C. Damour in Ho Chi Minh City, “This project will utilize the best in class technology and engineering that the US has to offer,” said Consul General Marie Damour, “Furthermore It’s an example of the commitment by the US Public and Private Sector to invest in, and be a strong partner for Vietnam’s growing energy infrastructure needs,”
On behalf of Bechtel, “Bac Lieu Province and Delta Offshore Energy have created a signature project for Vietnam and its people: adding future jobs in Bac Lieu, training its hard-working people in new skills, and offering opportunities for local businesses,” said Scott Osborne, Senior Vice President and General Manager, Bechtel Infrastructure. “We are proud to support the progress of the project with Bac Lieu and Delta Offshore Energy, and to be a part of the future of Vietnam, contributing to its energy security, trade, employment and economy.” Bechtel is the selected onshore firm conducting the engineering studies.
McDermott International, the selected offshore engineering firm, was represented via video conference by Mr. Ian Prescott Senior Vice President, Asia Pacific. The other consortium partners include GE Power supplying the latest 9HA.02 Combined Cycle gas turbine technology, Stena AB providing the floating jettyless LNG Terminal solution, JP Morgan as debt structuring agent and Mandated Lead Arranger for project finance, Black and Veatch as technical advisor, Marsh JLT as risk and insurance advisor, Howe Robinson Partners as LNG shipping advisor as well as Hogan Lovells, Gide Loyrette Nouel and local firm ACSV as legal advisors for the project.
Delta Offshore Energy as the development company and lead sponsor has aligned a strong “A” team consisting of these top world-class corporations in their LNG-to-power value-chain to ensure timely delivery of the project which attended the signing event.
Representatives from the Ministry of Industry and Trade (MOIT), Electricity Vietnam (EVN), National Power Transmission Corporation and Southern Power Corporation witnessed the signing of the MoU between Bac Lieu Province People’s Committee and DOE strategic partners.
The successful implementation of the project investment showcases Vietnam’s improved business environment to attract international investment in the energy sector. The major thrust of the MoU is to enable the commencement of project implementation within 12 months as per the Investment Policy Decision (IPD) and the Investment Registration Certificate (IRC) issued in January 2020 by the Bac Lieu Province authorities. The transparent and straightforward development process under Vietnam’s Law on Investment will be proven successful once the PPA is signed in December, less than one year from the issuance of the IRC
The project development is on track for a world record pace in the sector despite the complexity of an integrated LNG-to-power project within the context of a pandemic environment. DOE has nearly submitted all the requested deliverables by the Prime Minister consisting of: (1) the Grid Interconnection Study report submitted to Ministry of Industry and Trade (MOIT) in July (2) the Feasibility Study submitted in September and (3) the Environmental Impact Assessment will be submitted to the Ministry of Natural Resources and Environment in October.
“On behalf of the strategic partners in the Bac Lieu Province world-class consortium, DOE is honored to be part of this special investment project and thank the Prime Minister H.E. Nguyen Xuan Phuc, Vietnam’s government administration and the Bac Lieu Province People’s Committee for their continued support. Specifically, we thank the authorities for granting this unique opportunity to pilot the first thermal energy IPP project under the new Law on Investment. We remain committed to the project timeline per the IRC and PDP7. We are very optimistic about the future with this great opportunity for the country and I speak on behalf of our consortium that we all look forward to working closely together to reach Financial Close to immediately start construction next year,” stated by Ian Nguyen.
Formal negotiations with EVN for the 25 year Power Purchase Agreement (PPA) will commence immediately after this event. Several Front-End Engineering and Design (FEED) studies will be completed by the end of 2020, enabling the commencement of construction in 2021 and the first block of the power plant’s commercial operation date in 2024 as stipulated by PDP7 revised.
Simultaneously to support the PPA, DOE launched a Request for Proposals (RFP) for long-term LNG supply in early September 2020. “We expect to select final bidders in 2020 to finalize the Sales Purchase Agreement (SPA) in early 2021,” said Bobby Quintos, Managing Director of Delta Offshore Energy in the US.
Delta Offshore Energy has also selected the ERM Group Inc. for the Environmental, Social, Health and Impact Assessment (“ESHIA”) to support. Also, an RFP for Lenders’ legal advisor and Lenders’ technical advisor is already underway with leading firms.
The consortium is confident that given the experienced negotiation team from EVN and professional consultants from the investment consortium, the PPA will be finalized and signed by the end of 2020, subject to acceptance and approvals from MOIT and other relevant authorities on policies to enhance the bankability of the project and enable the project to access cost-competitive international financing.
About Delta Offshore Energy
Delta Offshore Energy focuses on developing clean energy solutions to meet the power generation needs of emerging economies. We originate structures and co-develop clean energy projects focusing on the rapidly evolving power sector in Vietnam. We encompass the entire spectrum of LNG to power, wind, and solar. For additional information, visit deltaoe.com.