Russian state-owned oil and gas producer Zarubezhneft and Belgian marine contractor DEME Offshore have set their sights on construction of a 1 gigawatt wind farm offshore Vietnam after signing of a pact this week.
The pair signed a memorandum of understanding covering the proposed Vinh Phong project, which Zarubezhneft said is estimated will cost $3.2 billion.
Zarubezhneft said it will share investment costs with a specially formed investment vehicle called DEME Concessions Wind.
Under the arrangement, the pair will hire oil and gas producing venture Vietsovpetro and DEME Offshore to manage the construction process, as both these companies “possess required technical and construction experience”, Zarubezhneft said.
Vietsovpetro, which operates several offshore oil and gas blocks in Vietnam, is a joint venture between Zarubezhneft and state-run PetroVietnam.
Zarubezhneft said that the Vinh Phong partners will strive to bring online the 600 megawatt first phase by 2026 and the 400MW second phase by 2030.
In 2019, Zarubezhneft set out strategic goals of entering wind and solar projects in Vietnam, Cuba, Southern Europe and Russia. However, these plans took a hit due to low oil prices and the onslaught of the coronavirus pandemic last year.
Vietnam's Power Development Master Plan
Vinh Phong is one of the 157 marine wind farm projects with total capacity of over 61GW that Vietnam’s Ministry of Industry & Trade has proposed to be included in the eighth version of the country’s Power Development Master Plan.
Following the Ministry’s proposal, revealed at the end of the last year, a survey permit for Vinh Phong was issued to an alliance of Zarubezhneft and DEME, with other potential investors also obtaining permits for proposed sites.
Earlier this year, four memoranda of understanding were signed for the 3.5GW La Gan offshore wind farm, also qualifying for inclusion into the master plan, for the supply of wind turbine foundations and harbour services.
The documents were signed with Vietsovpetro and three Vietnam-based contractors — CS Wind Corporation, PTSC Mechanical and Construction and South Petroleum Construction.
The investors in the La Gan project are Copenhagen Infrastructure Partners, Asiapetro and Novasia.
Vietnam’s Power Development Master Plan currently covers potential renewable energy projects until 2030, with a vision to cover out to 2045.
The plan has identified a total technical capacity for offshore wind at around 162GW based on studies by Denmark Energy Agency, of which approximately 80GW are located in areas with a high wind speed of over seven to nine metres per second, and are thus considered economically viable.