Questions this guide addresses
- How can plant utilization be reconciled with the rigidity of an LNG contract?
- Who is responsible for interfaces between terminal, pipeline, generation and transmission schedules?
- What minimum contractual and permitting conditions will lenders review before FID?
Method and verification scope
- Public World Bank and IFC guidance was used to distinguish interfaces between fuel, terminals, the grid and contracts, as well as the power plant itself.
- Each workstream is translated into evidence, responsible parties and schedule prerequisites required before FID to show the order of execution.
- The readiness table is for preliminary screening and does not replace technical, legal, environmental or social due diligence.
01 · System boundary
Define the full system from LNG supply to power sales, not just the plant
Limiting a CCGT project's review to the power-plant EPC scope can overlook major risks from fuel procurement through grid connection. The full project includes LNG purchasing, shipping, unloading, storage, regasification, pipelines, generation, transmission and collection of power payments. A delay at any one stage can delay overall operation.
At an early stage, map each asset's owner, operator, contractual customer and supplier in one interface diagram. Clear responsibility boundaries make it easier to identify missing connecting facilities, duplicated contingency allowances and conflicting schedule assumptions before final investment decision.
02 · Demand & dispatch
Translate demand forecasts into actual plant operation
Annual electricity-demand growth alone cannot determine a plant's LNG requirements. Seasonal loads, daily peaks, renewable output, transmission constraints and power-market dispatch rules determine CCGT utilization and the number of starts.
Efficiency, degradation, maintenance and fuel procurement patterns vary according to whether the plant serves baseload, intermediate load or system flexibility. Use several dispatch scenarios rather than one utilization figure, and link each scenario to its fuel volumes and revenue.
Hourly shape
Break annual totals down into time-of-day loads and dispatch opportunities.
Plant role
Clarify whether operation prioritizes efficiency or flexibility.
Scenario set
Test fuel requirements and cash flow together under low, base and high utilization.
Sources [1]
03 · Fuel & infrastructure
Combine the LNG contract and terminal capacity in one operating plan
A long-term LNG contract can provide volume stability, but its offtake obligations, destination and diversion terms, and pricing formula may not match variability in plant dispatch. Greater reliance on spot purchases can offer flexibility, but requires arrangements to absorb supply-availability and price risks.
Storage and regasification capacity at an onshore terminal or FSRU, vessel arrival intervals, port weather limits and pipeline pressure determine whether contracted volumes can become usable fuel. Review usable capacity after allowing for minimum inventory, heel, maintenance and delay buffers, rather than relying on nominal tank capacity.
04 · Contract alignment
Align volume, price and responsibility between the GSA and PPA
If take-or-pay obligations under the fuel supply agreement do not align with PPA dispatch or deemed-energy provisions, the project may pay for unused gas when its power is not purchased. The timing and proportion of fuel-price changes passed into the electricity tariff are also central to revenue stability.
Definitions of force majeure, supply interruption, underperformance and delay may cause different contracts to treat the same event differently. Compare remedies and liability caps across the LNG SPA or GSA, terminal-use agreement, EPC contract and PPA so that the project company does not bear risks it cannot control.
Volume
Align fuel offtake obligations with dispatch and power-purchase obligations.
Price
Check the formula and time lag for passing fuel-cost changes into the electricity tariff.
Relief
Align contractual relief and compensation for the same event.
05 · Site, grid & E&S
Confirm site, cooling, grid, environmental and social conditions as design inputs
Without confirmed site access, ground conditions, cooling and process water, emission limits, and gas and transmission connection points, EPC price and schedule estimates must rely on many assumptions. High ambient temperatures, water quality and atmospheric conditions directly affect output, efficiency, cooling methods and equipment selection.
Environmental and social review should be part of selecting the site and technical alternatives, rather than a final attachment to a permit application. Late identification of the area of impact, community engagement needs, biodiversity, land acquisition, and labor and safety management can lead to design changes and financing delays.
06 · FID gate
Assess all seven workstreams against the same FID criteria
FID checks can cover ① demand and dispatch, ② LNG supply, ③ terminals and pipelines, ④ GSA and PPA, ⑤ site, cooling and grid, ⑥ environmental, social and permitting matters, and ⑦ financing and EPC interfaces. Each workstream should use the same format to record its owner, completion criteria, remaining risks and resolution deadlines.
FID is less the point at which all uncertainty disappears than the point at which the parties agree who bears the remaining uncertainty and at what price. Connecting conditional contracts, long-lead items, financing conditions precedent and government support to an integrated schedule can reduce the gap between an optimistic programme and the actual execution path.
Seven-workstream interface checklist
Before marking a row complete, confirm the supporting documents, responsible party and impact on other workstreams.
| Workstream | Minimum evidence before FID | Key interface | Warning sign |
|---|---|---|---|
| Power demand | Demand and dispatch scenarios | PPA and fuel volumes | Low-utilization risk has not been allocated |
| LNG procurement | Volume, price and flexibility terms | Terminal and plant | Take-or-pay and dispatch are misaligned |
| Terminal | Site, capacity, berthing and permits | Vessels and pipeline | Insufficient arrival windows or storage headroom |
| Pipeline | Route, pressure, ownership and schedule | Terminal and CCGT | Gaps in completion-date or quality responsibility |
| CCGT | Performance, EPC and O&M criteria | Gas quality and grid | Guarantees do not match actual operation |
| Grid | Connection, transmission and dispatch terms | PPA and plant | Responsibility for grid reinforcement is unresolved |
| Contracts and financing | Integrated risk-allocation matrix | All workstreams | Completion or force-majeure definitions conflict |
Even when one workstream passes review, the whole project is not ready unless it aligns with the schedules and definitions in the other contracts.
Practical takeaways
- The core of LNG-to-Power is aligning the schedule, volumes and risks of the whole project, rather than optimizing each facility separately.
- If fuel-contract obligations and the PPA revenue structure are misaligned, cash flow may remain unstable even when the plant operates.
- FID criteria should cover permitting, the grid, environmental and social matters, and financing documentation as well as EPC readiness.
Sources and further reading
Source titles are preserved in their original language. Figures retain the reference period stated by each source.
- World Bank GroupLegal and Regulatory Framework for LNG-to-Power Development in Vietnam ↗
Reference material reviewing contractual and financing risks across the LNG-to-Power value chain.
Accessed 2026-08-31 - World Bank PPP Resource CenterUnderstanding Natural Gas and LNG Options ↗
A handbook covering natural gas and LNG infrastructure options and the basics of commercial structures.
Accessed 2026-08-31 - International Finance CorporationEnvironmental, Health, and Safety Guidelines — Power ↗
An international reference for environmental, health and safety review of thermal-power projects.
Accessed 2026-08-31 - International Energy AgencyGas 2025 — Executive summary ↗
Background on the structure and outlook of the international gas market as of its publication in 2025.
Accessed 2026-08-31