Considerations For Vietnam To Convert Coal-Fired Plants To LNG Power Plants


We start with Decision 500/QD-TTg of Vietnam’s Prime Minister on “Approving National Electricity Development Planning for 2021-2030 and Vision for 2050” (aka PDP VIII). No new coal-fired thermal power plants will be approved after 2030, and no new LNG power plants will be approved after 2035. The objective is to develop renewable energy power plants, and thus to make the transition from coal to biomass and ammonia energy. For projects that utilize LNG, the objective is to make the transition to hydrogen fuel, when hydrogen technology is commercialized and the market price is appropriate.

At present, Vietnam has limited ability to supply energy from biomass and green ammonia; thus there is no guarantee for long-term supply and stable operation. In addition, the commercial-scale production of green ammonia is very costly, and this makes the path towards “replacing coal energy with ammonia and biomass energy” long and uncertain.

With hydrogen, significant challenges are the high cost of storage at extreme temperatures, the cost to meet high product purity requirements and the cost of specialized transport equipment.

Therefore, in the immediate future, in order to ensure national power supply security, Vietnam needs to prioritize and enable the investment and development of LNG power sourcing and LNG power plants. In parallel with this, PDP VIII contains an outline for electricity source composition by 2030, whereby LNG will account for 14.9% of the total capacity of power plants that serve domestic demand.   

LNG is being fairly regarded as a “bridge fuel” from coal. It’s intended to have a significant positive effect on the power supply capacity and will help Vietnam approach its Net Zero goal by 2050.  

This article is aimed to provide markers of converting any one of Vietnam’s coal-fired thermal plants into an LNG-powered plant, focusing on what major advantages there are to utilize existing infrastructure, as compared to building new LNG power plants.

Issues in developing new LNG power infrastructure

We start with the third Vietnam Clean Energy Forum held in May 2023. It had the theme “Development of gas and wind power infrastructure in Vietnam”. A number of barriers and challenges in deploying new LNG infrastructure, were raised:

  • Costly infrastructure: To import and store a sufficient amount of LNG, the infrastructure required is a complex “fuel chain” starting upstream and progressing, midstream and downstream, including through ports, warehouses, pipelines, regasification systems, and power plants.

Investing and developing new LNG power plants will involve long-term land clearance and handover, followed by understanding and creating different forms of support mechanisms including fire prevention and fire fighting designs. Also, an LNG power plant needs to have a large capacity in order to optimize costs and ensure economic and financial efficiency. For example, ports need to accommodate large ships (>150,000m3).[1]

  • Electricity pricing pressure: High and fluctuating LNG prices purchased at spot would be an obstacle when signing power purchase agreements (PPAs) with EVN. Long-term supply contracts could overcome the issue. But in the end, EVN as a state-owned enterprise, will be very price sensitive.

So far there is no electricity generation price framework for LNG power plants. Additionally, LNG is expected to account for almost 15% of the power generation structure. Again, long term supply contracts can help stabilize the price.

Currently, many LNG power projects such as Nhon Trach 3, 4, Hiep Phuoc, Bac Lieu, Long An 1, 2 are facing challenges related to capital arrangements, negotiation of PPAs, negotiation of gas purchase and sale contracts (GSAs), for the reasons stated above.

  • No commitment of power output: The negotiation of PPAs is difficult. Power plants need a commitment to purchase power at an agreed price for a long term. This supports their long term financing. However, EVN only wants to purchase power according to its projections of actual demand. These two differing needs must be matched.
  • Technical standards & regulations: there are no technical standards nor regulations in Vietnam on the design, construction, transportation, operation and maintenance of LNG terminals or storage.

It is critical that the government provide clear guidance as to its needs and do so such that problems can plan around these needs. Government and power producers can then harmonize benefits and share risks which is so necessary in a working PPA.

The issues are currently being assessed by the National Assembly Standing Committee. Their objective is to implement policies for a working LNG electricity infrastructure.

Conversion of coal-fired plants to LNG power plants

LNG plants have several major advantages in comparison with coal plants. LNG plants are compact and smaller. Pipelines replace huge coal yards; no solid waste accumulates in the surrounding environment; there is no requirement for dust collectors, thus being greener and cleaner. Sourcing is more reliable and financing LNG projects is far easier than financing coal projects.

  • International experience

According to the US Energy Information Administration, between 2011 and 2019, the US switched 103 of its coal-fired power plants to natural gas-fired plants. The two different methods that were used to switch were, either to retire the existing coal plants and replace them with new natural gas combined cycle (NGCC) plants, or to convert the boiler of coal-fired steam plants to burn other types of fuel, i.e. natural gas.

Of these 103 coal plants, 17 adopted the first method, replacing the old plants with new NGCC plants. This increased the total generating capacity from 7.9MW up to 15.3MW. The increase was due to advanced turbine technology. The other 86 plants converted their boilers to natural gas, accounting for 14.3MW of generating capacity. In some of the later transitions, coal-burning capacity was maintained to allow the plants to burn whatever fuel was deemed most efficient.[2]

  • Vietnam’s circumstances

Approval has been given for Hiep Phuoc power plant to convert fuel from fuel oil (FO) to LNG. The conversion will take place in various stages based on assessments of basic design, technical design, environmental impact, fire prevention, connection and the feasibility of investment and construction of technology and equipment. The power plant is in the Hiep Phuoc industrial park of Ho Chi Minh city, the largest industrial park in the city. It has a strategic location, complete infrastructure, and easily connects to highways, three seaports and international airports. These circumstances provide many advantages in the supply of LNG to the plant.

In another case, written requests have been sent to the Prime Minister by the Thanh Hoa Provincial People’s Committee to consider and approve the conversion of coal fuel to LNG fuel for Cong Thanh thermal power plant in Thanh Hoa Province. The conversion of the plant would involve the addition of combined cycle gas turbine technology. Besides, the plant will have the advantage of Nghi Son deep-water port, which has a source of cooling sea water supply, and the advantage of the synchronous infrastructure of Nghi Son economic zone. When converted, Cong Thanh Thermal power plant will use imported LNG, consuming from 1.2 to 1.5 million tons/year; increasing the plant’s capacity from 600 MW to 1,500 MW after conversion.

If the Cong Thanh project is approved by the state, it can be used as a model for the remaining 4 projects that are currently behind in their path to conversion: Nam Dinh I, Quang Tri, Vinh Tan III, and Song Hau II thermal power plants.

According to “Current situation and solutions to accelerate the implementation of gas projects in Vietnam to effectively exploit domestic resources”, a report from the Vietnam Petroleum Institute, to ensure energy security, LNG power plants must be operated synchronously with the LNG production from offshore gas projects. Vietnam is expected to accelerate its domestic gas exploitation, and depend less on imported LNG.[3] Recently, Vietnam has discovered large gas reserves at: Block B (Binh Thuan), Blue Whale (Da Nang), and Ken Bau (Quang Tri).

When these 3 Blocks are brought into full operation, the scale of the power plants it can support, can be better assessed. Currently the prospective Block B gas will feed into O Mon I, II, III, IV thermal power plants. Blue Whale gas will feed into three thermal power plants in Quang Ngai, and two plants in Quang Nam. When the commercial value of Ken Bau gas reserve is confirmed, additional plants using Ken Bau gas can be developed in Quang Tri and Thua Thien Hue (expected 2031-2035).

An analysis of cost advantages must be thoroughly performed in order to evaluate the feasibility of converting existing / aged coal-fired plants into LNG power plants, taking into consideration: age of the plants, convenience of location, LNG source inputs, extension and conversion capacity.


In the energy roadmap, Vietnam considers LNG a “bridge fuel”; one that will help to secure the national power supply capacity until renewable energy is broadly commercialized at appropriate prices.  

The government has several key objectives: power supply security, cleaner environment and cost savings. The conversion of coal-fired power plants to LNG power plants can help reach these objectives.

The current major issues lie in the regulation and cost to develop new LNG projects.






Lam Nguyen Hoang Thao