Gas infrastructure and distribution company AG&P LNG has bought a 49% stake in the soon-to-start-up, $500m Cai Mep LNG Terminal in south Vietnam as the country prepares for a dramatic expansion in its LNG imports plan.

Nebula Energy-controlled AG&P LNG is buying into petroleum product terminal and trader Hai Linh Co’s 3m tonnes per annum onshore terminal in the Vung Tau district.

The terminal has three onshore tanks providing 220,000-cbm of LNG storage, breakbulk capabilities that allow it to reload LNG into smaller vessels and 14 bays for compressed natural gas and LNG truck-loading.

Cai Mep, which is located near the Mekong River delta, has pipeline connectivity to Vietnam’s largest power generation complex, the Phu My industrial zone, with a gas-fired capacity of 3.9 GW.

The terminal is scheduled for start-up in the third quarter of this year.

AG&P LNG is also setting up a trading and downstream gas distribution joint venture with Hai Linh. The United Arab Emirates-headquartered company will control a 51% stake in the downstream entity and 49% shares in the terminal and trading companies.

Cai Mep is the second and largest of two existing facilities in Vietnam — the first state-run, PetroVietnam-controlled 1 mtpa Thi Vai LNG terminal started up in July 2023 — sits next door to its smaller cousin.

Speaking to TradeWinds from Hanoi ahead of a ceremony today, AG&P chief executive Karthik Sathyamoorthy said mechanical completion at the terminal is complete and it is scheduled to start commissioning in May to June with the first gas targeted for September.

Nebula CEO and AG&P LNG vice chairman Sam Abdalla, who was also in Hanoi, said discussions are ongoing on the purchase of a first cargo and the shipping for the initial volumes.

Sathyamoorthy said 30% of the terminal’s capacity is already booked for an under-construction power plant which is due for start-up next year and will provide the baseload customer.

Initial imports will be distributed by truck loading to industrial customers as the facility is ramped up.

Over time AG&P LNG, which has ambitions to build up its own LNG shipping fleet to support its terminal developments, believes Cai Mep could supply other parts of Vietnam and the regional market with breakbulk shipments of LNG.

This is AG&P LNG’s first break into LNG terminal ownership since Nebula Energy bought a controlling 80% stake in the company in January with the ambition to grow with six new facilities over the next two years.

This investment will enable us to commercialise LNG supply, transportation, and delivery of LNG molecules through our integrated LNG ecosystem

Sam Abdalla

AG&P LNG wants to be a multi-terminal operator, Sathyamoorthy said, adding that it is looking to support developers that need extra expertise.

He said the company was attracted to Hai Linh’s terminal as it is close to completion and so five years in advance of other planned developments in the country.

“We believe that demand is today and we want to be part of the solution for today,” he said.

Sathyamoorthy revealed that AG&P LNG has identified 29 LNG terminal permit applications for Vietnam — some private and others government-backed.

The CEO also flagged up that Vietnam’s Ministry of Development and Trade has just approved the country’s energy policy for 2030 which detailed that it will take 10 to 15 mtpa of LNG to be used for the power sector by 2030.

“We are just getting started,” Sathyamoorthy said. “We are early. We will expand together with the country and its demand.

“We want to put our flags in as many countries as we can with respect to unlocking LNG import infrastructure and supplying LNG to those markets.”

“Cai Mep LNG Terminal will play a pivotal role in enhancing energy security of Vietnam, paving the way for energy transition in Vietnam,” he said.

Hai Linh Co CEO Le Van Tam said: “Rapid industrialisation and strong economic growth currently being experienced by Vietnam are expected to generate strong gas demand growth led by power and industrial sectors, combined with the balanced LNG supply market.

“With this partnership, we will be able to expedite the terminal’s start-up and commissioning and LNG terminal operations into Vietnam and serve the exponentially growing LNG demand in our country.”