AsiaElec: Vietnam power plant tests Hanoi-Moscow ties

On the back of Russia’s February 24 invasion of Ukraine and the subsequent jolt to global energy markets, a yet-to-be-completed power plant in south Vietnam is threatening to sour relations with Moscow dating back to Soviet times.  

Vietnam has, to date, remained silent on the invasion and the subsequent sanctions imposed by the Biden administration in Washington, even with the US now ranked as the Southeast Asian nation’s third-largest trading partner. Russia, by comparison, does not appear in the top 10.

The site in question, a 1.2-GW coal-powered facility at Long Phu in the extreme south of the country near Ho Chi Minh should have been completed by 2019, but remains in a state of limbo, with the Russian firm contracted to complete the job, Power Machines, itself having been sanctioned prior to the Ukraine war, as a result of President Putin’s earlier annexation of the Crimean Peninsula in 2014.

In the original agreement to develop and build the site, Power Machines was listed as responsible for progress and overall quality throughout the facility in addition to the co-ordination of contractors used, while PetroVietnam took charge of construction and any related domestic issues.

All machinery and industrial equipment used at the site was specially purchased from Russia.

At present, though, just under 78% of construction work is reported as having been completed, and negotiations with the Russian government have been ongoing for almost four years, although this has now been further complicated by the latest round of Western sanctions on Moscow imposed since late February.

Compounding the issue is the more recent removal of Russia from the global banking payment system, SWIFT.

Reports from Vietnam in the past week indicate that the management of the Long Phu facility is now looking to replace Power Machines after the Russian engineering firm filed a legal case for arbitration in Singapore 2019, deeming the sanctions imposed on the back of Russia’s actions in the Crimea a case of ‘force majeure’.