Vietnam’s ambition to sustain annual GDP growth of at least 10% through 2030 is putting the country’s power sector under mounting pressure to expand capacity, with liquefied natural gas (LNG) seen as a key part of the energy transition.
Speaking at a conference on LNG-fired power and energy security in Danang on Friday, Deputy Industry and Trade Minister Nguyen Sinh Nhat Tan said the country’s energy system must “go one step ahead” to meet rising demand from economic development, national security, and improving living standards.
Under the government’s plans, by 2030, Vietnam aims to build sufficient LNG import capacity to supply gas-fired power plants and other users, while gradually developing regional LNG energy hubs.
Infrastructure for LNG imports, storage, and consumption will be prioritized as the country seeks to expand its gas market to around 30-35 billion cubic meters a year.
According to the revised eighth national power development plan (PDP VIII), Vietnam is expected to build and operate 22 LNG power plants in 2025-2030. By 2030, there will be 15 projects put into commercial operation with a total capacity of 22,524 MW.
Vietnam’s first LNG power plant, Nhon Trach 3 & 4, in Dong Nai city, southern Vietnam. Photo courtesy of Petrovietnam.
LNG seen as bridge for rising power demand
Power is increasingly viewed not simply as a commodity but as critical economic infrastructure, directly affecting investment, industrial development, urbanization and emerging sectors, said Phan Thai Binh, Vice Chairman of the Danang People’s Committee.
Ensuring reliable electricity at reasonable cost will therefore be a prerequisite for Vietnam’s double-digit growth ambitions, he said.
LNG-fired power is expected to provide large-scale, relatively stable, and flexible generation that can support the grid when renewable output fluctuates.
Vietnam’s power needs are changing rapidly in both scale and structure, said economist Tran Dinh Thien, former head of the Vietnam Institute of Economics. Rising electricity demand and pressure to decarbonize the energy mix make LNG an important option as domestic gas reserves decline, while also supporting the integration of renewable energy and reducing emissions compared with coal-fired generation.
The pressure is already visible in Danang, where local power generation currently meets only about 50% of the city’s electricity demand, according to the city’s Industry and Trade Department.
New industrial developments are expected to add to that pressure. The more than 400-hectare Hoa Ninh eco-industrial park, with investment of VND6.2 trillion ($237.26 million), is being positioned to attract high-tech manufacturing, semiconductor companies, and data centers, all of which require highly reliable power supplies.
Danang has proposed bringing forward the first phase of the $1.59 billion Hoa Ninh LNG power plant, with planned capacity of 1,500 MW, from a reserve list for 2031-2035 to the priority pipeline for completion before 2030.
The city has also proposed increasing capacity at the Lien Chieu LNG storage facility from 500,000-1 million tons a year to 1-2 million tons during 2026-2030 and 3-5 million tons after 2030, alongside investment in gas pipelines and transmission infrastructure.
Financing and infrastructure remain key hurdles
The challenge for LNG projects is no longer simply whether Vietnam needs additional generation capacity, but whether projects can secure financing and operate competitively, said economist Ngo Tri Long of the Vietnam Association of Financial Consultants.
LNG projects require substantial upfront investment and have long payback periods, while uncertainty over future cash flows can make lenders reluctant to commit capital, he noted.
Volatile global LNG prices, electricity pricing mechanisms, and access to storage, ports and gas pipelines can all affect project economics and financing capacity.
The government does not need to guarantee investor profits, Long said, but should establish a stable and transparent framework that allocates risks appropriately.
For projects to become bankable, power purchase agreements need to provide greater clarity on key factors including contracted output, electricity prices, foreign-exchange exposure, and responsibilities when transmission infrastructure is delayed.
Banks will also need to be complemented by international lenders, infrastructure funds, green bonds, and other sources of long-term capital, he said.
At the conference, experts also called for Vietnam to move away from a model of “one LNG project per locality” toward shared regional energy infrastructure.
Shared LNG terminals, pipelines, and transmission networks could improve capacity utilization, spread infrastructure costs, and enhance investment efficiency, while helping establish larger industrial and energy ecosystems.