Yet many LNG projects worth billions of dollars remain stuck “on paper” due to persistent policy and administrative hurdles, including unresolved land clearance issues.

Bureaucratic bottlenecks persist

According to the revised Power Development Plan VIII, Vietnam's LNG import-based power capacity is expected to rise from 0.8 GW to 22.5 GW by 2030, through the development of 15 projects. This would represent approximately 12.3% of the country’s total power generation capacity - a critical share intended to replace coal and balance the rising share of renewables.

In practice, however, many of these projects are moving slowly or remain stagnant. For instance, the USD 2.2 billion Quang Ninh LNG project is still facing land clearance obstacles. The provincial government has issued a final warning and threatened forced land acquisition if owners refuse to hand over the land.

In Ca Na, a 1,500 MW LNG project received only one bid during its tender in July, with a proposed tariff of 12.83 US cents per kWh - an unusually high rate reflecting investor concerns over policy and financial risks.

Projects that were once expected to lead Vietnam’s LNG development - such as Son My I and II (in Lam Dong province) and the Son My LNG terminal - are still stuck in paperwork and financing limbo. The Nghi Son LNG project, valued at USD 2.2 billion (equivalent to about 57,000–58,000 billion VND) and with a 1,500 MW capacity, is considered a vital link in the revised national plan. But after two bidding rounds and two extensions, the project was cancelled due to lack of interest from investors.

Another prominent example is the 3,200 MW Bac Lieu LNG power plant, which has been dormant for years. Despite receiving its investment certificate in January 2020 and being scheduled to begin phase one by late 2023, the project has not broken ground. Over five years later, unresolved land clearance and compensation issues have left the site idle.

One rare bright spot is the Nhon Trach 3 and 4 LNG projects. Earlier this year, Nhon Trach 3 was connected to the grid, and by the end of June, Nhon Trach 4 delivered its first power using imported LNG - marking the first time Vietnam generated electricity from LNG.

The Thi Vai LNG supply chain is now fully operational, covering import, storage, and distribution, and is backed by a 25-year long-term supply agreement for the Nhon Trach plants. However, other projects are still hindered by the absence of a long-term offtake framework, no clear mechanism for direct negotiation between EVN (Vietnam Electricity) and LNG suppliers, and a fragmented market with low purchasing power and weak bargaining leverage.

Stuck plans may remain on paper

Commenting on the Nghi Son LNG project, Nguyen Thai Ha, CEO of T&T Group, highlighted the high barrier of a 1% bid guarantee - equivalent to around USD 22 million - as a major deterrent.

“Even if a company wins the bid, they still have to renegotiate with the provincial authority and EVN on the power purchase agreement. Winning the bid doesn’t guarantee implementation,” Ha said.

Similarly, Pham Huu Hien, Director of Binh Phuoc Energy Investment JSC, pointed out that LNG projects in Vietnam struggle to secure financing because power purchase agreements (PPAs) commit to purchasing too little electricity annually. “Without guaranteed cash flow, it’s nearly impossible to raise capital, especially with LNG price volatility. Investing in these projects feels like entering a trap,” Hien said.

According to energy companies, the problem is not technology but risk allocation in contracts and ambiguous policies. One of the most debated issues is the capacity charge, which investors consider essential for covering high fixed costs, especially when grid operators may not fully dispatch the power. Regulators, on the other hand, worry that such fees create market distortion and shift burdens onto power purchasers and ultimately consumers.

An expert from the Vietnam Energy Association told Tien Phong: “We’ve set high goals for LNG, but without clear policies, infrastructure, and grid readiness, it’s impossible to realize those ambitions.”

The expert added that LNG is a crucial component in Vietnam’s energy transition. A typical LNG project takes 7–10 years from planning to commissioning. If delays persist, the 22.4 GW of LNG capacity forecast in the adjusted Power Development Plan VIII risks becoming merely symbolic.

The consequences could go beyond short-term power shortages. They may also disrupt the broader development of renewable energy, which relies on LNG for system stability. Therefore, the expert recommended urgent action, including transparent regulations on capacity charges, clear mechanisms for LNG purchase obligations in both gas and electricity contracts, termination clauses to improve bankability, and the possibility of state project buyouts.

“LNG infrastructure - including power plants, terminals, and transmission networks - must be developed in sync. We can’t allow a scenario where a completed plant is held back by grid delays. A capable centralized entity should be appointed to procure LNG or coordinate group purchases to strengthen negotiation power,” the expert concluded.

Tien Phong