Vietnam's Ministry of Industry Rejects Proposal to Raise Long-Term Gas Power Purchase Agreement to 95%
The Ministry of Industry and Trade of Vietnam has proposed to increase the minimum long-term power purchase agreement (Qc) for LNG projects from 65% to 75%, while rejecting requests to extend it to 85-95%. This decision is significant as it aims to balance investor interests and operational capabilities of the power system without exerting excessive pressure on electricity prices.
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The Ministry of Industry and Trade (MOIT) plans to increase the minimum long-term power purchase agreement (Qc) for LNG projects from 65% to 75%. This adjustment is aimed at facilitating financing for large-scale LNG projects while ensuring system balance.
Despite investor calls for an increase to 85-95% and extension of the agreement period to 20-25 years, MOIT highlighted risks of 'over contract' scenarios, where contractual obligations exceed actual system demand, potentially increasing overall system costs. The consultation involved 16 agencies and major energy firms, indicating broad stakeholder engagement in the regulatory process.
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