Vietnam: SCG ups stake in petrochemicals complex; Hyosung to build PDH and PP complex


Thailand’s Siam Cement Group (SCG), through its wholly owned subsidiary, Vina SCG Chemicals Co (VSCG), has entered into a share purchase agreement with QPI Vietnam Limited (QPIV), a subsidiary of Qatar Petroleum, to acquire all of QPIV’s 25% equity stake in Long Son Petrochemicals Company Limited (LSP). This equity transaction, valued at US$36.1 million, will increase SCG’s direct and indirect stake in LSP to 71% (from 46%), while the Vietnamese parties will hold 29%.

LSP is positioned as Vietnam’s first petrochemicals complex. The project possesses competitive aspects ranging from integration, economies of scale, and competitive feedstock flexibility. Non-petrochemical supporting infrastructure such as a deep sea port and other facilities are also included at approximately 30% of the total investment cost.

At the heart of the project is a 1 million-tonne ethylene cracker with flexible gas and naphtha feed to yield in total olefins capacity of up to 1.6 million tonnes/year depending on the feedstock mix. The olefins cracker is equipped with high flexibility to utilise gas up to 80%, of total feedstock, for cost optimisation and will be fully integrated to the downstream polyolefins (PE/PP) capacities of similar scale.

The project will be financed with a combination of equity and debt, whereby the final investment decision (FID) is expected by H1, 2017 and the CAPEX outlay will be finalised afterwards. With a five-year construction period, the start-up is expected in 2021.

LSP is located just 100 km from Ho Chi Minh City, the capital city of Vietnam. In 2015, Vietnam imported more than 2 million tons of polyolefins, with future high single digit growth rates anticipated.

Licensed in 2008, the complex was to be an investment by a joint-venture of SCG, QPI and Vietnam National Oil and Gas Group (Petrol Vietnam).

It was previously slated to begin construction in 2014 and to be completed in 2017. However, the construction was delayed due to site clearance issues.

Meanwhile, according to the Business Korea, Hyosung, a South Korean producer of PP, will invest Hyosung US$1.2 billion to build a propane dehydrogenation (PDH) and PP complex, as well as liquefied petroleum gas (LPG) storage tank and LPG and petrochemical product warehouse at the Cai Mep Industrial Zone in Ba Ria-Vung Tau Province, located near Ho Chi Minh.

Hyosung has signed a MOU with the government of Vietnam to go ahead with the plan, which aims to increase the company's market share for PP in Vietnam, China, and the rest of Southeast Asia.

The project will be implemented in two stages. For the first phase, Hyosung will invest US$133 million to build a LPG tank and US$336 million for the 300,000-tonne/year PP production plant. For the second phase, it will invest US$496 million to construct a PDH plant and US$226 million for the second PP plant, which will double its capacity at the site. However, Hyosung said the size of investments and schedule for the MOU can change.

The company already has a presence in Vietnam, where it has made an investment of US$1.3 billion in the Nhon Trach Industrial Zone in Dong Nai Province, from 2007, producing spandex fibres and automotive tyre cords. It started with spandex fibres and in 2010, the construction of Hyosung’s steel cord plant was completed and has been in operation since then. Hyosung Vietnam had sales of US$871 million since 2014, adds the firm.


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