By Francesco Guarascio
HANOI, March 31 (Reuters) – Vingroup has told Vietnam’s government it wants to ditch a plan to build the country’s largest LNG-fired power plant and embark on a renewable energy project instead, as the Iran war has boosted the risk of the fuel becoming too expensive, a document showed.
The March 25 document, which is being reported by Reuters for the first time, was sent about two weeks after U.S. energy equipment giant GE Vernova announced it had been selected to supply gas turbines and generators for the 4.8 gigawatt liquefied natural gas power plant.
Vingroup, the country’s largest conglomerate by market capitalisation but a newcomer to the energy sector, declined to comment. Vietnam’s industry ministry and GE Vernova did not respond to requests for comment.
The document is one of the first tangible signs that LNG projects might be scrapped or postponed due to the war.
New Zealand Prime Minister Christopher Luxon also said this week that a planned LNG terminal would go ahead only if the business case stacked up.
Vingroup unit VinEnergo broke ground on the planned plant in the northern port city of Haiphong in September. Completion of the first 1.6 GW phase was slated for 2030.
SOARING PRICES, QATAR DAMAGE
LNG prices have, as of last week, soared 85% since the U.S. and Israel launched strikes on Iran on February 28, closing the Strait of Hormuz – a narrow waterway that normally carries about a fifth of global LNG supplies – to most ships.
Exacerbating the outlook for LNG has been damage to liquefaction trains in Qatar, a major producer, sidelining 12.8 million tons per year of the fuel for three to five years.
Vingroup said in the document that the developments highlight “the significant risk of high fuel prices for LNG power projects”.
It added that the plant, when fully operational, would need about 5 million metric tons of LNG a year with an annual import value of around $3.5-3.8 billion, which would “create significant pressure on the economy’s foreign exchange needs.”
RENEWABLE PROJECT PROPOSED
Communist-run Vietnam is a fast-developing country with a large power-hungry industrial base, mostly composed of foreign multinationals and their suppliers manufacturing goods for export.
Its first two LNG‑powered plants came online last year. Including the first phase of the Haiphong plant, the country plans to have 16 plants by 2030 with a combined installed capacity of 24.1 GWs, which would make LNG one of its top sources of power.
Instead of the LNG-powered plant, Vingroup asked the industry ministry to consider an investment plan for a hybrid renewable energy project combined with a battery energy storage system (BESS). A BESS system stores electricity from renewable sources to maximise their use by discharging power during peak demand.
The document did not specify the type of renewable energy that would be used but estimated the costs of the BESS project at around $25 billion, saying it would be a valid alternative to the LNG-powered plant if equipped with appropriate transmission infrastructure.
It noted, however, that the cost would be nearly five times higher than the LNG-powered plant. It also urged the ministry to consider a “suitable electricity pricing mechanism”.
VinEnergo was established only in March 2025 but has launched a string of energy projects.
(Reporting by Francesco Guarascio; Additional reporting by Phuong Nguyen and Khanh Vu in Hanoi and Emily Chow in Singapore; Editing by Edwina Gibbs)
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