SK Innovation has outlined a phased energy cooperation plan that links liquefied natural gas (LNG) and small modular reactors (SMR) to address the rapidly increasing power demand in Vietnam driven by artificial intelligence (AI) and advanced industrial growth.
In the short term, the plan aims to enhance power supply stability by utilizing LNG supply chains based in the United States and Australia, while expanding cooperation into next-generation SMR technology in the long term.
Choo Hyung-wook, CEO of SK Innovation, visited Vietnam on July 16-17 to meet with key officials from the Ministry of Industry and Trade and the state-owned energy company PetroVietnam (PVN) and its power subsidiary, PV Power, to discuss energy and advanced technology collaboration.
The discussions were prompted by forecasts indicating a sharp increase in Vietnam's power demand due to the growth of AI data centers and semiconductor industries.
To attract large power-consuming AI data centers and advanced manufacturing facilities, a stable power supply infrastructure must be established first. The speed at which power infrastructure can be expanded will significantly impact Vietnam's competitiveness in the AI industry and its ability to attract investment.
Choo stated, "The rapid advancement of AI is expected to lead to an explosive increase in power demand, and for the time being, LNG is a suitable solution to ensure energy security."
SK Innovation proposed expanding LNG power generation as a practical response to Vietnam's short-term power demand increase.
While Vietnam's power demand is rising due to economic growth and manufacturing expansion, fluctuations in international LNG prices and supply are seen as burdensome factors for expanding gas power projects.
SK Innovation plans to leverage its gas field assets and long-term LNG contract portfolio in the U.S. and Australia to provide fuel at competitive prices for Vietnam's gas power projects.
Diversifying supply regions will reduce dependence on specific areas and mitigate geopolitical risks. The company aims to establish a stable fuel procurement system by linking U.S. and Australian LNG to Vietnam's power generation projects amid uncertainties in the global energy market.
While LNG serves as a short-term solution to meet immediate power demand, next-generation SMR technology is proposed as a long-term stable power source.
SK Innovation is collaborating with TerraPower in the U.S. to commercialize sodium-based fourth-generation reactor technology. Sodium reactors are designed to integrate energy storage systems, allowing for flexible responses to changes in power demand. SK Innovation aims to commercialize this technology by 2030.
Beyond just power generation and fuel supply, SK Innovation is also working to establish an energy and industrial ecosystem that connects LNG power plants, industrial complexes, and AI data centers.
The company plans to apply a specialized energy-industrial cluster (SEIC) model to attract AI data centers and advanced manufacturing facilities near the Quang Ninh LNG combined cycle power project currently underway in Vietnam.
By attracting large power demand centers near power plants, the stability of power generation projects can be enhanced. In Vietnam, this could lead to increased investment, employment, and technology transfer in advanced industries based on power.
In the long term, it is expected that the scope of cooperation can be expanded beyond LNG power generation to include renewable energy and energy storage systems (ESS).
Choo expressed hope that after the verification and commercialization of next-generation SMR technology, a long-term partnership with PVN in the nuclear power sector can be established.
Meanwhile, SK Innovation E&S announced on July 27 that it would bring ultra-light crude oil secured from the Barossa gas field in Australia to South Korea.
* This article has been translated by AI.
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