Vietnam and France Collaborate on LNG Long Son Project: A Strategic Energy Initiative

The LNG Long Son project, located in Ho Chi Minh City, represents a significant collaboration between Vietnam's T&T Group and France's TotalEnergies, with a total investment of around $1.6 billion. This initiative aims to ensure energy security for southern Vietnam and the nation as a whole, particularly during the ongoing energy transition towards 2050.

On September 10, 2023, a memorandum of understanding was signed in Paris, witnessed by Vietnamese General Secretary To Lam, outlining the joint development of the LNG Long Son power plant. The plant is projected to have a capacity of approximately 1,500 MW and is expected to be one of the largest LNG facilities in Vietnam upon completion.

According to the adjusted Power Development Plan VIII, LNG power is allocated a significant share due to its efficiency and lower emissions. Vietnam plans to establish 22 LNG projects by 2035, with 15 expected to be operational by 2030, contributing a total capacity of 22,524 MW. However, experts emphasize that achieving these targets requires addressing various bottlenecks related to financing, market access, infrastructure, and risk-sharing mechanisms.

Nguyen Ngoc Nghi, Deputy General Director of T&T Group, highlighted the importance of this project, noting that it will enhance local energy supply and support the broader economic development of the region. The project is strategically located in the Southeast economic zone, which is expected to become a key growth driver for the country.

“Nguyen Ngoc Nghi highlighted the importance of this project, noting that it will enhance local energy supply and support the broader economic development of the region.”Nguyen Ngoc Nghi, Deputy General Director of T&T Group

In light of recent geopolitical tensions that have reduced LNG supply by up to 20%, concerns have arisen regarding potential price increases impacting Vietnam's LNG project development plans. Nevertheless, the partnership with TotalEnergies, a leading global LNG producer, is seen as a promising avenue to navigate these challenges. TotalEnergies is responsible for providing competitive LNG prices, arranging international financing, and supplying technology solutions for the power plant and LNG infrastructure.

As part of the agreement, T&T Group will handle legal and administrative procedures in Vietnam, ensuring compliance with local regulations and facilitating project approvals. The collaboration aims to establish a long-term gas supply agreement, positioning TotalEnergies as the primary LNG supplier for the project's lifecycle.

This project aligns with Vietnam's broader energy strategy, as outlined in Resolution 70-NQ/TW, which emphasizes the development of LNG infrastructure and the role of private enterprises in the energy sector. The partnership between T&T and TotalEnergies exemplifies the increasing proactive role of Vietnamese companies in ensuring national energy security and reflects the strengthening economic ties between Vietnam and France.