Siam Cement Approves Vietnam Petchems Project
Vina SCG Chemicals, a wholly owned subsidiary of Thai conglomerate Siam Cement Group (SCG), has taken a final investment decision to proceed with construction of its long-delayed petrochemical complex in Vietnam, which will be the first in the country.
Located on Long Son Island in Ba Ria-Vung Tau, the complex is being built by Long Son Petrochemicals (LSP), in which SCG indirectly holds a 71% stake (53% via Vina SCG Chemicals and 18% via Thai Plastic and Chemicals) with PetroVietnam holding the remaining 29%.
The complex will center on a 1 million t/y ethylene plant, which will use both gas and naphtha to yield up to 1.6 million t/y of olefins capacity, depending on the feedstock mix. Ethane feedstock will be sourced locally with propane and naphtha imported on secured contracts and at competitive prices, SCG said. This will facilitate the cracker using up to 80% of gas feedstock, which the group said will optimize costs.
Downstream plants will produce high density polyethylene, linear low density polyethylene and polypropylene.
The project has been licensed since 2008 with Qatar Petroleum as one of the original investors along with SCG and PetroVietnam. Construction was previously targeted to start in 2014 with completion due in 2017. However, building was delayed because of site clearance issues and then in December 2015, Qatar Petroleum withdrew as a result of restructuring its development strategy. SCG took over Qatar Petroleum’s 25% share in March 2017.
LSP was due to issue a letter of intent to key contractors on Jul. 14 and the final lumpsum turnkey contract is expected to be signed in the second half of 2017. Construction is estimated to take four and a half years with commercial operations now anticipated by the first half of 2022.
The project will cost about $5.4 billion and be financed through a combination of foreign denominated debt (60%) and equity (40%). Supporting infrastructure such as a deep sea port and other facilities are also included at approximately 30% of the total investment cost.
In 2016, Vietnam imported approximately 2.3 million t of polyolefins, according to SCG.
