Vietnam and fossil gas
Vietnam has one of the fastest growing economies in Asia with a GDP growth rate averaging above 6% per year since 1990 and economic growth is forecasted to continue in the future. Between 2015 and 2019, GDP grew 30%. Economic growth combined with population growth, from 80 million in 2000 to 96 million in 2018, has resulted in increased energy demand.
The economic growth of Vietnam has also corresponded to an increase in greenhouse gases. Vietnam has an opportunity to transition to green energy which will largely depend on government policy action. Key energy policies are outlined in the Vietnam Energy Outlook Report, the most recent released in 2019, which include expanding renewables in the power sector to 33% (excluding hydro) by 2050, increasing energy efficiency 8-10% by 2030, and reducing emissions 20-30% by 2030.
As of September 2020, the government forecasts the country's demand for electricity to rise 8.6% during the 2021-2025 period, and 7.2% in the 2026-2030 period. Total electricity generation in 2019 was 230,774 GWh, representing a 10% annual increase from 2015 electricity generation of 159,678 GWh. Electricity generation is forecasted to double to 338 TWh by 2035.
Total installed capacity is forecasted to more than double to 138 GW in 2030 and 222 GW in 2040.
In Vietnam, the Prime Minister's Office has direct oversight of the entire energy industry while the Ministry of Industry and Trade (MOIT) specifically manages the overall strategy and planning for the energy industry. The MOIT has submitted the National Energy Power Development Master Plan #8 (PDP VIII) to Prime Minister Nguyen Xuan Phuc in October 2020 and it is expected to be approved by end of year 2020.
PetroVietnam (PVN), the national oil and gas company, is responsible for the majority of development in the natural gas sector. PVN is involved in exploration, production, trading, transportation, imports, and some businesses in power generation. 
Natural Gas Demand
Vietnam's energy consumption has grown rapidly since the 1990s. This growth has been a result of the electrification of much of the country, thus an increase in energy demand in the power sector, and the rapid development of heavy industry.  Total gas consumption in 2019 was 9.9 bcm.
For the 2000-2010 period, natural gas demand growth averaged 20% per year. For the 2011-2015 period, natural gas demand growth averaged 10% per year. 
As of 2020, both supply and demand of natural gas is concentrated in the southern part of the country.
Key Demand Drivers
While new industrial demand in the iron and steel, chemical, and fertilizer sectors has been growing, the main driver of gas markets in Vietnam will be increased demand for LNG from the power sector, which accounts for 80% of natural gas demand in Vietnam. Demand for LNG from Vietnam's power sector is set to reach 8.5 mtpa, or 11.72 bcm, by 2030 according to the country's industry ministry. While the increased gas demand is largely from the power sector, it has also been driven by declining domestic gas production. 
The other key driver of gas demand growth will come from the fertilizer sector. As the industry in Vietnam moves away from chemical fertilizers to more organic products, gas demand will increase due to its heavy use in the manufacturing process. As the government seeks to improve farming practices and make them more organic, the fertilizer sector is expected to double in size by mid-2020s and gas demand could rise by a factor of six and reach demand of 6.5 bcm by 2035.
in 2019, Que Lam Group opened a large bio-organic fertilizer plant which is expected to produce 2 million tonnes of organic fertilizer by 2025 and 3.5 million by 2035.
The Long Son Petrochemical Complex, designed to produce various petrochemical products, is also under construction and expected to be operational by 2022.
Industrial demand growth has largely been centered on the iron and steel, chemical and fertilizer sectors. Electronics and medical oxygen for healthcare are the main drivers of the gas market in 2020.
Projection of Demand Growth
The current natural gas demand in Vietnam is almost entirely centered in the power sector. The Ministry of Industry and Trade (MOIT)'s master plan forecasts the power sector to account for 70-80% of total domestic gas consumption by 2035. By 2030, it is projected that nearly 50% of the gas fuel for power generation will come from imported LNG.
While Vietnam's natural gas demand could face a minor contraction due to the global Covid-19 pandemic, it is expected to recover in 2021 and continue to be boosted by high gas usage in electronics and metallurgy, according to gasworld Business Intelligence. Metallurgy and chemicals/petrochemicals, markets that were hard hit by the global pandemic, are expected to recover and achieve 6-7% growth in 2022-2023. Overall average natural gas market growth is forecasted to be 5-8% annually for 2020-2025.
In the 7th Edition of APEC Energy Demand and Supply Outlook, it is projected that gas demand from the power sector will grow from 8.6 bcm in 2015 to 26.3 bcm by 2035.
The most optimistic projection found in the Gas Master Plan, shows gas demand reaching 13-27 bcm in 2021-2025 and 23-31 bcm in 2026-2035.
The 2020 OIES Report forecasts gas demand reaching 27 bcm by 2035.
Natural Gas Supply
As of 2019, Vietnam has 22.8 trillion cubic feet of gas reserves. Total gas production in Vietnam as of 2019, was 9.9 bcm.
As of 2020, there is no integrated pipeline infrastructure which links the whole country. Therefore, the government has been trying to match supply sources with specific demand areas and end users. The majority of Vietnam's gas supply as well as consumption is concentrated in the southern continental part of the country. Significant reserves exist in the Song Hong Basin (offshore north-central region) and also in the Malay-Tho Chu Basin (south-west part of the country).
Due to an increased shortage of domestic natural gas and as coal faces stronger opposition, the government of Vietnam has stepped up its push for LNG. Vietnam will have to import 1.2 mtpa, or 1.65 bcm, of LNG by 2025 and 8.5 mtpa, or 11.72 bcm, by 2030 for its power plants.
Potential New Gas Sources
A number of new gas fields have been identified, but both have faced numerous delays and mounting uncertainty surrounds the feasibility of these sources.
The Ca Voi Xanh project, expected to produce 6 bcm annually, also known as Blue Whale, is an offshore gas site discovered in 2011 that holds an estimated 5.3 trillion cubic feet of gas and is under development by Exxon Mobil. A final investment decision was expected in 2020, however, the project has stalled in recent years and geopolitical uncertainties combined with failure to agree to commercial terms with the Vietnamese government have cast doubt on its development.
As of 2020, the other large gas development site, Block B gas power project, expected to produce 4 bcm annually, has also faced numerous project delays and uncertainties.
The expansion of the Su Tu Trang field in Southeast Vietnam is expected to add 2.5 bcm annually by mid-2020s and 10 other fields are expected to produce 7 bcm collectively, by 2035.
In July 2020, Eni discovered hydrocarbons in the Ken Bau-2X exploration well located in Block 114, Song Hong Basin, offshore of Vietnam. Preliminary estimates of the discovery are 7-9 trillion cubic feet.
In 2020, Jadestone Energy decided to delay development of its Nam Du and U Minh gas fields. The company has not yet received approvals from the Vietnamese government for its development plans. 
In November 2020, PetroVietnam produced first gas from the Sao Vang-Dai Nguyet gas field, estimated to have an output of 1.5 bcm.
Current Gas Supply Projects
Proposed Gas Supply Projects
The upcoming National Power Development Plan (PDP VIII), which covers the 2021-2030 period, is expected to be approved by end of year 2020 and will include seven additional LNG import terminals and 22 LNG-to-power projects. The government's push for LNG development has drawn investor interest into the domestic LNG sector, including significant interest from the United States. As of 2020, US firms are involved in 12 of out the 22 LNG-to-power projects proposed.
As the Vietnam government pivots to policy favoring LNG in the PDP VIII, it is important to note that there is no centralized plan to ensure that LNG integration is linked efficiently in the downstream chain.
Thi Vai LNG Terminal, the first terminal has been started and is due onstream by 2022. As shown in Table 1, many of the proposed projects have multiple phases and can be adapted to meet actual demand.
|Project Name||Location||Capacity||Expected Commencement Date||Sponsor||Project Status||Main Users|
|Thi Vai LNG Terminal||South East, Thi Vai||1-3 mtpa||scheduled COD 2022||PetroVietnam, Bitexo, Tokyo Gas||started construction||Nhon Trach 3&4 CCGT|
|South West LNG Terminal||South West, Ca Mau (Hon Khoai)||1-2 mtpa||2023 - 2025, 1 mmt/y
After 2025, 2 mmt/y
|N/A||Proposed||Kien Giang and O Mon Power Centres, Ca Mau GDC|
|Son My LNG Terminal||South East, Binh Thuan||1-3 mtpa||2023-2025, 1-3 mmt/y
2027 - 2030, 3 mmt/y
2031 - 2035, 3 mmt/y
|PetroVietnam, AES||Proposed||Son My Power Centre, Phu My GDC|
|Tien Giang LNG Terminal||South East, Tien Giang||4-6 mtpa||2022 - 2025||N/A||Proposed|
|Thai Binh Floating Storage and LNG Delivery (FSRU)||North, Thai Binh||0.2-0.5 mtpa||2026 - 2030||N/A||Proposed|
|Cat Hai (Hai Phong) LNG Terminal||North, Hai Phong||1-3 mtpa||2030 - 2035||N/A||Proposed||Hai Phong 3 CCGT|
|Khanh Hoa LNG Terminal||Central, Khanh Hoa||3 mtpa||2030 - 2035||Petrolimex||Proposed|
Table 2: Proposed Gas Pipeline Projects under Gas Master Plan
|Project Name||Capacity (bcm/yr)||Expected Start||Length (km)||Diameter (inches)|
|Pipeline from the LNG Thi Vai re-gasification terminal to the existing gas distribution centre||4.5||2020 - 2022||12||18|
|Pipeline from the South West LNG terminal to Ca Mau||5||2022 - 2025||85||20 - 28|
|Pipeline from Son My LNG terminal to Son My Electricity Centre||5 - 11||2023 - 2025||10||38 - 45|
|Son My - Phu My pipeline||9||2023 - 2025||85||30 - 34|
|Son My - Su Tu Trang[White Lion] (offshore) pipeline||2 - 4||after 2025||80 - 100||20 - 28|
|Pipeline from the FSRU terminal to Thai Binh pipeline||0.5||2026||20 - 50||8 - 10|
|Pipeline connecting east and southwest regions of Vietnam||2 - 5||2026 - 2035||TBD||TBD|
|Trans-ASEAN pipeline (depending on sources of imported gas)||5 - 10||2026 - 2035||TBD||TBD|
Under the draft PDP Master Plan VIII, a list of 22 new LNG power plants with a combined potential capacity of 108.5 GW has been proposed. This would double Vietnam's total installed generation capacity of 56 GW.
|Project Name||Location||Capacity||Expected Start||Sponsor||Project Details/Status|
|Hiep Phuoc||Ho Chi Minh City||1200 MW||2022||Hai Linh Co. Ltd.||Power plant upgrade; LNG to be imported via Hai Linh LNG Terminal|
|Nhon Trach 3 & 4||Dong Nai, South East||1300 -1760 MW||2023 - 2024||PVN||Both plants to use LNG imported via Thi Vai terminal|
|Son My 1 Power Plant||Binh Thuan, southeast||2000 MW||2027||EDF (France), Sojitz, Kyushu (Japan),
Pacific Corportation (Vietnam)
|Plant to use LNG imported via Son My terminal|
|Son My 2 Power Plant||Binh Thuan, southeast||2250 MW||2023-2025||AES Group (US), PetroVietnam Power||Plant to use LNG imported via Son My terminal|
|Bac Lieu Power Station||Bac Lieu, south||3200 MW||2023 - 2027||Delta Offshore Energy (Singapore)||PPA to be signed by end of 2020.|
|Long Son Power Station||Ba Ria-Vung Tau, southwest||Phase I: 1200 MW
Phase II: 1200 MW
Phase III: 1200 MW
|2025 - 2026||EVN, potentially Mitsubishi Corp. and General Electric||Plant to use LNG imported via the Long Son LNG terminal|
|Ca Na Phase 1||Ninh Thuan, southeast||1500 MW||2025 - 2026||B.Grimm Power, Gulf Energy Development Plc||Plant to use LNG imported via terminal at Ca Na port|
|Cai Trap Island Power Plant||Hai Phong||Phase I: 800 MW
Phase II: 800 MW
|Phase I: 2025
|Approved in the 2021-2030 Nation Electricity Development Plan|
|Ka Ga (Phase 1) Power Station||Binh Thuan, southeast||1200 MW||2024||Energy Capital (US), KOGAS (Korea), Excelerate (US)||Fully integrated project with FSRU, gas pipeline, and power plant.|
|Ka Ga Phase 2 and 3 Power Station||Binh Thuan, southeast||2400 MW||2028||Energy Capital (US), KOGAS (Korea), Excelerate (US)|
|My Giang CCGT Power Station||Khan Hoa, southcentral||3000 - 6000 MW||2026-2029||EVN, Petrolimex, JXTG||Signed MoU in July 2019.|
|Long An 1 & 2 Power Plant||Long An||3000 MW||2025-2026||VinaCapital||MoU signed.|
|Quang Ninh LNG-fired||Quang Ninh, northeast||1500 MW||2026||PVN, Colavi, Tokyo Gas, Marubeni|
|Mien Trung Power Center Project||Chu Lai Industrial Zone||Phase I: 750 MW
|Phase I: 2023
Phase II: 2024
|Tien Lang Power Station||Hai Phong, northeast||Phase I: 2250 MW
Phase II: 2250 MW
|Phase I: 2027
Phase II: 2030
|ExxonMobil||Added to PDP8|
|Cai Mep Ha LNG-to-power Station||Ba Ria-Vung Tau, southeast||6000 MW||Phase I:
Phase II: 2026
Phase III: 2030
|T&T Group, Gen X Energy||Awaiting approval|
|Thai Binh LNG-to-power Plant||Thai Binh, northeast||4500 MW||Truong Thanh Viet Nam Group||Awaiting approval|
|Ca Mau 3 LNG-fired Power Plant||Ca Mau, south||1500 MW||2026 - 2027||PVN||Awaiting approval|
|Chan May-Lang LNG-to-power Station||Thua Thien Hue, northcentral||Phase I: 2400 MW
Phase II: 1600 MW
|Phase I: 2024
Phase II: 2027
|Chan May LNG (US-Vietnam joint venture)||Construction scheduled to begin 2021.|
|Dung Quat Power Station||Central Quanf Ngai province||Phase I: 750 MW
Phase II: 750 MW
|Phase I: 2023
Phase II: 2024
|Unit 1 & 3: EVN
Unit 2: Sembcorp Corp.
|Investment approved by government|
|O Mon Power Complex||O Mon||Unit 2: 1050 MW
Unit 3: 1050 MW
Unit 4: 1050 MW
|Unit 2: 2024
Unit 3: 2025
Unit 4: 2023
|EVN||Prime Minister has approved investment planning of O Mon II|
|South Von Phong LNG-to-power||Khan Hoa, southcentral||9600 MW||Millennium Petroleum Group||Awaiting approval|
|Van Phong CCGT Power Plant||Van Phong Economic Zone, Khanh Hoa province||Phase I: 1500 MW
Phase II: 1500 MW
|Phase I: 2025
Phase II: 2028
|Tan Phuoc Power Station||Tan Phuoc||Unit 1: 1000 MW
Unit 2: 1000 MW
Unit 3: 1000 MW
|Unit 1: 2023
Unit 2: 2024
Unit 3: 2025
Unit 4: 2026
|Vietnam Electricity (EVN)||Proposed|
|Hai Lang LNG Power Plant||Quang Tri Province||Phase I: 1500 MW
Phase II: 3000 MW
|2026 - 2027||T&T Group, KOSPO Company, KOGAS Company, Hanwha Company||Added to revised electricity power development 2011-2020 plan|
Projection of Gas Production
According to to the most recent Gas Master Plan, the optimistic projection shows growth from the current 10 bcm in 2018 to 13-19 bcm in 2021-2025, and to 17-21 bcm in 2026-2035. This assumes development of new gas fields, including Ca Voi Xanh and Block B.  The Gas Master Plan forecasts LNG imports of 5 mtpa (6.9 bcm) by 2025 and 15 mtpa (20.7 bcm) by 2035.
A more conservative assessment in the 2019 Energy Outlook Report for Vietnam shows gas production rising until mid 2020s, reaching about 18 bcm, before declining if some of the new gas sources are not developed.
The 2020 OIES report forecasts production reaching 20 bcm in 2027, and declining to 16 bcm by 2035.
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