JAKS inks MoU with T&T Group for joint development of LNG-to-power project in Vietnam
KUALA LUMPUR (Sept 13): JAKS Resources Bhd has inked a memorandum of understanding (MoU) with T&T Group Joint Stock Co to explore the possibility of collaborating to develop the 1,500MW Quang Ninh 2 liquefied natural gas (LNG)-to-power project in Quang Ninh province, Vietnam.
Under the terms, both JAKS and T&T Group will agree on a common approach in relation to the implementation of the LNG-to-power project, including the location, design, technology and infrastructure involved for the import terminal and the power plant, and the selection of LNG and gas-fired power solutions suppliers.
Separately, T&T Group will be responsible for all legal matters pertaining to the LNG-to-power project. JAKS, on the other hand, shall be the strategic investor and is responsible for the engineering, construction and commission process.
The MoU, which was signed on Sept 11, 2021 at the Embassy of Vietnam in Helsinki, Finland, demonstrates the common vision of both parties to address Vietnam's increasing domestic electricity demand, increasing gas demand for gas-fired generation plus the required importation of LNG into Vietnam, said JAKS chief executive officer Andy Ang Lam Poah in a statement today.
"This is yet another breakthrough for JAKS to tap into the LNG field, which will essentially strengthen the group's power and energy business division in Vietnam. Our first ever entry into the power-energy sector was through the construction of the 1,200-megawatt Hai Duong Power Plant, which has fully commenced commercial operations in January this year.
"We are confident of developing the LNG-to-power project with our capability, expertise and experience gained thus far, together with the support from T&T Group. This synergistic collaboration with T&T allows us to leverage on each other's strengths to create value and growth in Vietnam," he said.
Ang added that there is vast potential to expand JAKS' footprint in Vietnam, especially in the area of power and energy generation, given that Vietnam's economy is expected to grow 6.6% in 2021 and electricity demand is projected to continue to rise.
"Importantly, under the draft Power Development Plan VIII (2021-2030), the Vietnamese government strongly supports the concept of using the LNG-to-power projects to provide sustainable and environmentally friendly energy generation due to environmental concerns, as well as the anticipated power shortage from 2021-2035," he said.
T&T Group is a Vietnamese joint stock company incorporated in 1993 with diversified business operations in real estate, financial investment, manufacturing industry (motor, car, plastic and mineral), sports and import-export activities. They are also an investor and project developer in the energy sector in Vietnam.
On Sept 7, JAKS announced a 13-fold increase in its net profit to RM28.81 million for the second quarter ended June 30, 2021, from RM2.17 million a year ago, supported by a RM37.5 million share of profit from its 30%-owned power plant joint venture in Vietnam.
JAKS Resources' share price closed 2.97% or 1.5 sen lower at 49 sen today, bringing the group a market capitalisation of RM990.92 million. Year to date, the stock has dropped 27.94% from 68 sen on Jan 4.