Delta Offshore Energy (DeltaOE) and Liquefied Natural Gas Limited (LNGLY)
(LNGL) jointly announce an alliance with the Bac Lieu Provincial Government in Vietnam to
deliver an LNG-to-power project for the province.
The DeltaOE led power project includes the
construction and operation of an LNG import terminal, 3,200-megawatt combined-cycle power
plant and delivery of power generation to the Bac Lieu Province. The integrated project is
expected to commence operations in 2023 pending finalization of anticipated government
approvals.
LNGL’s wholly-owned subsidiary, Magnolia LNG LLC (Magnolia), shall deliver two million tonnes
per annum (2 mtpa) of liquefied natural gas (LNG) to DeltaOE pursuant to a supply and purchase
agreement (SPA), on a free-on-board (FOB) basis for a 20-year term with options to extend the
term. DeltaOE shall, in turn, deliver gas to the power plant, generate electricity, and sell its
output to the province pursuant to a power purchase agreement (PPA).
The SPA and PPA are
linked on a back-to-back basis providing an integrated LNG-to-power solution for the province.
Specific terms and conditions of both the SPA and PPA, respectively, have been negotiated in
term sheet form and the various contracting parties are currently completing the SPA and PPA
contractsfor execution. Routine conditions precedent apply in both the SPA and PPA documents
and the parties shall make reasonable efforts to complete these contracts expeditiously.
“This agreement is a major achievement for the Magnolia LNG project as we progress our global
commercial and marketing push toward a final investment decision,” said Greg Vesey, Managing
Director and Chief Executive Officer, LNG Limited. “We are pleased to welcome Delta Offshore
Energy, the Government of Vietnam, and the Bac Lieu Provincial Standing Committee to the
Magnolia LNG project, as customers that value the advantages Magnolia enjoys.
This agreement
represents a significant advancement of our long relationships held with DeltaOE, the province,
and Vietnamese leadership, including our earlier hosting of the province leadership and DeltaOE
at the Magnolia site.”
"Delta Offshore Energy's Bac Lieu project addresses Vietnam's need for an LNG import terminal
to provide access to growing the LNG industry as a feedstock for electricity generation," said
Bobby Quintos, Engineering Managing Director for Delta Offshore Energy.
"Our alliance with LNG
Limited will allow the Government of Vietnam to have a stronger relationship with the U.S.
market and the long-term stability of the Henry Hub Index, which fits perfectly with the
Vietnamese National Power Development Plan."
