General Electric (GE) Lands $1.6B Power Plant Equipment Deal in Vietnam for 2025

GE Secures Landmark Gas Turbine Contract in Vietnam

On May 16, 2022, General Electric (GE) announced that its Power division clinched a significant contract to supply advanced power generation equipment to a top Vietnamese EPC consortium. This project supports PetroVietnam Power Corporation’s Nhon Trach 3 and 4 combined cycle power plants.

With a capacity of 1.6 gigawatts (GW), the Nhon Trach plants are set to become operational by 2025, supplying vital electricity to industrial zones in Vietnam’s Vung Tau province, approximately 43 miles from Ho Chi Minh City. This marks GE’s inaugural H-Class gas turbine order in Vietnam and the nation’s first-ever LNG-fueled power facility. Additionally, GE will enhance the performance of the existing Nhon Trach 1 plant by boosting its operational visibility, reliability, and availability while reducing operational costs.

Key Highlights

• GE awarded contract to equip Nhon Trach 3 and 4 combined cycle power plants with cutting-edge generation technology.
• The new LNG-powered plants will energize industrial sectors in Vung Tau by 2025.
• Upgrades to Nhon Trach 1 plant will improve efficiency and cost-effectiveness.
• The deal underscores GE’s dedication to supporting cleaner energy transitions amid its strategic split into three independent companies.

Vietnam’s Shift Toward Cleaner Energy Solutions

Vietnam currently relies on coal for roughly one-third of its electricity but is rapidly pivoting toward renewable energy and natural gas to meet its ambitious net-zero emissions goal by 2050.

Ramesh Singaram, CEO of GE Gas Power Asia, stated, “Vietnam’s renewable energy sector is poised for substantial growth, and efficient, low-carbon gas power will be essential to maintain grid stability. This pioneering LNG project represents a new era for gas power in Vietnam and aligns perfectly with the country’s sustainable growth objectives.”

Implications for Investors and GE’s Future

This major equipment contract provides a boost to GE’s Power segment, which has faced operational losses nearing $2 billion over the past three years despite generating $16.9 billion in sales in 2021. Profit margins have fluctuated widely, reflecting challenges in the sector.

The agreement highlights GE’s commitment to cleaner energy infrastructure as it prepares to restructure into three focused companies specializing in aviation, healthcare, and energy. The new entity will consolidate renewable energy, power, and digital operations. Despite recent stock declines, this deal signals positive momentum for GE’s energy business.

Disclosure: The author held no positions in GE or related securities at the time of writing.

Correction (May 25, 2022): An earlier version mistakenly attributed the turbine contract to GE’s renewable division instead of its Power division.

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