HO CHI MINH CITY -- Vietnam's PetroVietnam Gas on Sunday signed memorandums of understanding with two U.S. energy companies -- AES Corp. and Alaska Gasline Development Corp., on the sidelines of U.S. President Donald Trump's two-day visit to the country.
Trump was in Vietnam for the Asia Pacific Economic Cooperation meeting in Danang. His next stop is the Philippines, where he is attending a summit of Asian leaders.
Under the agreement signed in Hanoi, AES will work with PV Gas on its Son My liquefied natural gas terminal project in Binh Thuan Province, in southern Vietnam. Mark Green, president of AES' Eurasia unit, said the project will bring sustainable and cost-effective energy to Vietnam and help satisfy growing demand for electricity and natural gas in Asia.
AES, headquartered in Virginia, has power generation and distribution operations in 16 countries. In 2016, it had revenue of $13.6 billion and managed some $36 billion in assets.
AES is already active in Vietnam. It built the Mong Duong 2 coal-fired power plant in the country's northeastern Quang Ninh Province. The 1,240 megawatt plant was financed with a $1.46 billion loan and has been operating commercially since April 2015.
Following the signing ceremony, the Overseas Private Investment Corp. of the US, released a letter of intent supporting the project, which will include an LNG import terminal and a 2,250MW combined-cycle power plant in Vietnam. OPIC said the project will provide around 5% of the country's power generation capacity and support its economic development.
The letter included a statement from OPIC President and CEO Ray W. Washburne expressing hopes for its investment in Vietnam's energy industry. He said the project was in line with OPIC's
effort to promote the expansion of LNG markets in the Indo-Pacific region.
Let it flow
Alaska Gasline Development and PV Gas, meanwhile, have agreed to cooperate in LNG supply and upstream investment, opening the door for the U.S. company to sell liquefied natural gas to Vietnam. The two sides also plan to look for ways for the Vietnamese state-owned company to invest in Alaskan gas fields.
Alaska Gasline Development is owned by the state of Alaska, financing and developing gas projects. It owns the Alaska LNG Project, which holds an estimated 35 trillion cubic feet of reserves. The $43 billion project is expected to begin exporting LNG by around 2024.
The Vietnamese deals highlight Trump's effort to drum up business in the region for U.S. companies. In a speech to APEC leaders on Sunday, Trump expressed his preference for stronger bilateral ties to countries in the Asia-Pacific region, rather than the multilateral approach favored by his predecessors.
The LNG import and power projects are important to PetroVietnam and its PV Gas unit, as Vietnam tries to diversify its sources gas supply, while meeting the country's growing demand for energy.
On Nov. 7, Liam Mallon, president of ExxonMobil's development unit, told a business forum on the sidelines of the APEC meeting in Danang that his company is nearing a final agreement with Vietnam on a massive natural gas project in the central part of the country no later than 2019, which will aim to start production in 2023.