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Comparison of domestic natural gas and LNG fuel sources

• According to the revised Power Plan VIII, the electricity demand of the whole system is expected to reach 500 billion kWh by 2030 (+7%/year), requiring an increase in installed capacity of 12%/year. Gas power increased the most (+21%/year), mainly thanks to projects using LNG instead of domestic gas.
• Domestic gas production is declining due to old wells, causing supply to be limited in the short term. In contrast, imported LNG is highly flexible, helping to diversify the supply. However, the cost is higher due to liquefaction, transportation and regasification. Vietnam is investing heavily in LNG ports and reprocessing stations to be able to provide enough fuel for both power generation and industrial production
• Domestic gas prices are gradually increasing at 2-4%/year, to 9.5 USD/million BTU (Q1/2025). This is due to the gradual depletion of supply and the steady increase in transportation costs
• LNG prices fluctuated sharply in the period 2020–2022, rising to $34/million BTU due to the Russia-Ukraine crisis, then falling rapidly to $11.9 in 2024. In 2025, LNG prices may recover slightly to ~$14 but will fall to ~$11.5 in 2026. In the medium and long term, LNG is expected to be close to or lower than domestic gas, creating advantages for LNG power development.