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LNG Ltd to supply gas to Vietnam project

Magnolia gas to be used at Delta Offshore Energy's LNG-to-power project

Australia’s Liquefied Natural Gas Ltd is teaming up with Delta Offshore Energy to deliver an LNG-to-power project in Vietnam’s Bac Lieu province.

The two companies announced their alliance with the Bac Lieu provincial government on Monday which will involve the construction and operation of an LNG import terminal and 3200-megawatt combined-cycle power plant.

The Delta-led power project is expected to commence operations in 2023, pending final government approvals.

LNG Ltd will deliver roughly 2 million tonnes of LNG per annum to Delta, subject to the signing of a sale and purchase agreement, on a free-on-board basis for 20 years, with options to extend the term.

Delta will use the gas at the power plant, with electricity generated to be sold to the Bac Lieu province.

"Delta Offshore Energy'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," Delta’s engineering managing director, Bobby Quintos, said.

“Our alliance with LNG Limited will allow the Government of Vietnam to have a stronger relationship with the US market and the long-term stability of the Henry Hub Index, which fits perfectly with the Vietnamese National Power Development Plan."

The gas will come from LNG Ltd’s proposed Magnolia LNG export project in the US which will have initial capacity to produce 4 million tpa of LNG from two modules, which could be expanded with two additional units in a later phase development.

“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,” LNG Ltd chief executive Greg Vesey said.

“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.”

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