Vietnam’s state-owned gas company, Petrovietnam Gas, has awarded its first long-term liquefied natural gas (LNG) supply contract to global energy major Shell, marking a key step in the country’s evolving gas market.

Under the agreement, Shell will supply LNG to Vietnam for five years, from 2027 to 2031. The deal covers about 400,000 metric tonnes of LNG annually, according to a statement released by Petrovietnam Gas late on Tuesday.

The LNG will be delivered on a delivered ex-ship (DES) basis to the Thi Vai LNG import terminal in southern Vietnam, near Ho Chi Minh City. The terminal, operated by Petrovietnam Gas, is designed mainly to supply gas to two nearby gas-fired power plants, which began commercial operations in mid-December.

Vietnam only started importing LNG in 2023, with the first cargo arriving at the Thi Vai terminal. Until now, all LNG imports into the country have been purchased from the spot market. Data from Kpler shows Vietnam imported about 0.5 million tonnes of LNG in 2025.

The contract with Shell follows Petrovietnam Gas’ first-ever tender for long-term LNG supply, which was issued in August last year. The move signals Vietnam’s intention to secure more stable LNG supplies as it expands gas-fired power generation and reduces reliance on domestic gas production.

Shell, one of the world’s largest LNG suppliers, continues to strengthen its presence in Asia as demand for cleaner-burning fuels grows across the region.