US aids its energy companies to boost engagement with Vietnam

The US government has been providing strong support for American companies to increase engagement in Vietnam’s energy market which is projected to continue delivering strong growth in the next decades

Vietnam is a dynamic economy that is part of the Asian growth in next 20 years and sees increasing demand for energy while American companies, with new competitive edges, can fulfil the Southeast Asian country’s energy needs, Kent Logsdon, Principal Deputy Assistant Secretary, Bureau of Energy Resources, US Department of State, told Hanoitimes in a recent interview.  

“Vietnam is one of a number of countries that want to talk to us on how we can work on legislation, regulations that will make it better for international companies, including US companies, to come into the market,” Logsdon said, adding that he found great willingness from the Vietnamese side to cooperate and coordinate.

US companies see huge growth in Asia in the next 20 years. “They are already there and we try to find ways to work with governments in the region to help them better compete, find the transparent and open business climate they are looking for to work with governments in the region to exploit the resources there,” the official said.

LNG needs

When asked about Virginia-based AES’s plan to build a gas-fired power plant in central Vietnam, Logsdon said that the US government’s support is more on the regulatory side. “ENR has been talking to AES and see their great interest. We’re happy to see they want to work there and be engaged. We’re happy to be supportive of their efforts.”

In a related development, the Vietnamese government has agreed to AES’ plan to build a gas-powered plant under the BOT format in coastal Binh Thuan province with an investment of US$5 billion. Vietnam is expected to import some US$2 billion annually to feed the plant once it become operational.

Liquefied natural gas (LNG) is the segment that US companies have started to compete worldwide. He acknowledged that transportation in long distances from the US is a major problem, but the cost starts to come down.

“Our US companies are doing incredibly well, are developing LNG as an export and they continue to offer a good price and work hard to look for new markets. I think they are very eager to work in Asia, with the government of Vietnam. There’s a lot of interest continuing from US LNG companies who believe that there is a market they can compete,” he elaborated.  

Vietnam will remain reliant on oil and gas to accommodate its rapid economic growth in the coming decades.

Logsdon said American oil and coal companies are interested in “filling some of those needs. They are excited about pass successes in Vietnam and a good future is waiting for them.”

Energy dialogue

Regarding concerns about China’s increasing coercion of Vietnam’s long-standing oil and gas operations in the East Sea, Logsdon stated that the US government has been very clear of freedom of navigation and will continue to ensure the South China Sea is an international open waterway.

“US companies and other companies should be free to operate there. We continue to make that clear, both in words and in deeds,” he asserted.

Vietnam and the US have held annual energy security dialogue over the past two years where the two sides discuss ways to foster energy cooperation.

“We advanced broader discussions further to move beyond the discussion to action. We want to see meaningful investment in Vietnam. I came to Vietnam because of the criticality that Vietnam plays as a partner,” Assistant Secretary of State for Energy Resources Francis R. Fannon told a group of reporters in Hanoi in June.

The US and Vietnam had positive discussions on possible collaboration on activities under the Asia EDGE (Enhancing Development and Growth through Energy) initiative to support the implementation of sound electricity and natural gas resources, including LNG, renewable energy, and energy efficient technologies, as discussed at the US-Vietnam Energy Security Dialogue, the US Embassy in Hanoi said in a statement in June.