Vietnam expects delays in offshore gas projects, putting its power supply at risk
- October 5, 2023
- Posted by: Quatro Strategies
- Categories: Asia Pacific, Oil & Gas
Vietnam’s offshore gas development projects involving major players like Exxon Mobil and Gazprom are facing significant delays, as per a draft government document. This situation raises concerns about the future of these projects in the South China Sea, where Vietnam and China have territorial disputes. Particularly, Exxon has been exploring options to withdraw from its Blue Whale project off Vietnam’s coast due to increasing pressure to align with green-energy goals.
Delays in these projects could also add to Vietnam’s ongoing concerns about its power supply. The country has experienced blackouts in recent months and planned to rely on domestic gas, including gas from Exxon and Gazprom projects, for a significant portion of its power generation capacity by 2030. The Blue Whale project, for example, was designed to consist of five power plants with a combined capacity of almost 4 gigawatts, but none of these plants have been built yet.
The draft document from Vietnam’s industry ministry, dated August 31, suggested a new timeline for the Blue Whale project, indicating that the five power plants will become operational when gas is available from that block, tentatively in 2028. It also noted that gas sale agreements for four of these plants are expected to be signed this year.
Exxon has been actively seeking buyers for the Blue Whale project for years. While Exxon states that business activities for the project are continuing as usual, there’s growing uncertainty about the future of the project. Administrative hurdles and disagreements over electricity pricing with Vietnam’s power grid operator have contributed to delays in the project’s development.
Similarly, Gazprom’s main gas project in Vietnam is also facing prolonged uncertainty. The government draft document suggests that Gazprom’s plant, which was initially expected to be operational before the end of this decade, is now unlikely to come online before 2030 as the company is assessing gas reserves.
These delays in major offshore gas projects may impact Vietnam’s ability to secure its power supply and meet its energy goals. Moreover, the territorial disputes in the South China Sea further complicate the situation, adding geopolitical dimensions to the challenges faced by these projects.
QUATRO Strategies International Inc. is the leading business insights and corporate strategy company based in Toronto, Ontario. Through our unique services, we counsel our clients on their key strategic issues, leveraging our deep industry expertise and using analytical rigor to help them make informed decisions to establish a competitive edge in the marketplace.
Interested in learning more?
Sign up for Top Insights Today
Top Insights Today delivers the latest insights straight to your inbox.
You will get daily industry insights on
Oil & Gas, Rare Earths & Commodities, Mining & Metals, EVs & Battery Technology, ESG & Renewable Energy, AI & Semiconductors, Aerospace & Defense, Sanctions & Regulation, Business & Politics.
Read more insights
Spot LNG market sees uptick in Asian demand as prices drop sharply
Chinese liquefied natural gas (LNG) buyers are returning to the spot market after months of restraint, seizing the opportunity presented by a sharp drop in global gas prices. Last week, at least two LNG shipments were purchased by Chinese firms at around $10 per million British thermal units (mmBtu) — the lowest price point seen in about a year.
This marks a significant shift in behavior for the world’s top LNG importer, which had been largely inactive in the spot market through early 2025. Until now, Chinese buyers had been reselling contracted volumes and reducing imports due to high gas prices and weaker-than-expected domestic demand. According to customs data, China’s LNG imports dropped by 24% from January to April compared to the same period last year.
Russia’s carbon footprint surpasses Europe’s as fossil fuel divide widens
The energy transition in Europe and Russia has taken dramatically different paths since 2022, with the European Union (EU) sharply reducing its reliance on fossil fuels while Russia has increased its dependence on them. For the first time, power producers in Russia emitted more carbon dioxide from fossil fuel use in 2024 than their EU…
Europe braces for summer fossil fuel surge as hydro and wind falter
This summer, northwest Europe could see a rise in demand for gas and coal-fired electricity as falling hydropower reserves and low wind speeds strain the region’s renewable energy output. The dual setback is occurring just as Europe seeks to rebuild depleted natural gas storage following the winter, adding stress to an already tight energy balance.
Hydropower stocks in continental Europe are significantly below average this year, with snowpack levels in the Alps—vital for Swiss and southern German hydropower—well under 2024 figures. Recent dry months have compounded the problem. In Germany, March and early April brought such low precipitation that soil moisture plunged below long-term minimums in many regions, while Rhine river shipping was disrupted by low water levels, triggering freight surcharges and limiting vessel loads.
