Dec. 27, 2019 Updated: Dec. 26, 2019 7:24 p.m.
A liquefied natural gas supply deal between the proposed Magnolia LNG export terminal in Louisiana and the Vietnamese government took a major step forward.
In a Dec. 19 decision, the Vietnamese government added the Bac Lieu LNG-to-Power project to its National Power Development Plan. Under the plan, Singapore-based Delta Offshore Energy will build a natural gas-fired power plant in Bac Lieu province and a supporting offshore LNG import terminal.
LNG Limited, the Australia and Houston-based company developing Magnolia LNG export terminal in Lake Charles, landed a 20-year deal in September to supply 2 million metric tons of liquefied natural gas per year to Delta’s 3,200-megawatt power plant.
The addition of the project to Vietnam’s National Power Development Plan clears the path for Delta to negotiate and finalize the power purchase agreement for the natural gas-fired power plant, which had originally been planned as a coal-fired facility.
Magnolia LNG has yet to be built, but the company holds a federal permit to build a plant that will produce 8 million metric tons of LNG per year. LNG Limited is seeking permission to boost that production by another 800,000 metric tons per year; the Vietnamese supply represents one-fourth the proposed plant’s currently permitted production.
Delta Offshore Energy plans to build a natural gas power plant in Bac Lieu province as well as an offshore LNG import terminal, known in the industry as a floating storage regasification unit, or FSRU.
Tankers from Magnolia LNG will arrive at the planned FSRU, where the supercooled liquid fuel will be converted back into its gas form and fed into an underwater pipeline that will move the natural gas to the onshore power plant.
LNG Limited is headquartered in Australia but is in the process of moving its global headquarters to Houston.
The Federal Energy Regulatory Commission in April 2016 permitted the company’s Magnolia LNG project to produce 8 million metric tons of liquefied natural gas per year. LNG Limited’s request to boost production by 800,000 metric tons of liquefied natural gas per year remains pending.
Houston service company KBR and South Korean construction firm SK E&C Co. Ltd will serve as the engineering, procurement and construction firms for the LNG export terminal project.
By Sergio Chapa