Thai conglomerate poised to start construction of giant Vietnam petrochemical complex

By Linh Nguyen    July 26, 2018 | 07:36 pm PT
Thailand’s Siam Cement Group (SCG) might begin construction of a long-delayed $5.4 billion petrochemical complex in Vietnam this quarter after recently buying out its local partner in the project.

Roongrote Rangsiyopash, president and CEO of SCG, announcing the second quarter results, said the conglomerate acquired PetroVietnam’s 29 percent stake last month.

SCG “is scheduled to sign a $3.2-billion loan package with Thai and international financial institutions in August” to push the investment forward, he said.

“The project is set to proceed with the engineering, procurement, and construction (EPC) phase in Q3/2018 and begin commercial operations by Q1/2023, which will create jobs and income as well as boosting Vietnam’s industry and economy.”

Long Son, the country’s biggest petrochemical project, was conceived as a joint venture between SCG, PetroVietnam and Qatar Petroleum in 2008.

Situated in Ba Ria Vung Tau province 100 km from Ho Chi Minh City, the main market and economic engine of Vietnam, it will have a designed olefin capacity of 1.6 million tons per year.

But due to the global recession, the project stalled, and the Qatari partner withdrew in 2015 with SCG buying its stake last year.

The delay has taken the estimated cost up from $4.5 billion to $5.4 billion though SCG still believes it is a “very competitive price when compared to other projects globally.”

The group said the project, Vietnam’s first fully integrated petrochemical complex, would enhance its competitiveness in the industry in the region.

“It is a project of world scale, with high competitiveness, as it uses world-class technology and includes high flexibility in raw materials usage. This will allow LSP to use gas feedstock for up to 70 per cent of its raw materials. This makes the cost of materials lower than at other petrochemicals plants in the region.”

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