Expansions: SCGC progresses on ethane feedstock project in Vietnam; LyondellBasell to expand propylene capacity in Houston

Thailand-based SCG Chemicals, or SCGC, has announced the latest progress on the ethane feedstock enhancement project at the Long Son Petrochemicals Complex (LSP) in Vietnam (LSPE Project). It adds that the project has reached another key milestone with preparations underway for the construction of ethane storage tanks.

LSP has entered into an Engineering, Procurement, and Construction (EPC) contract for the ethane storage tanks, with construction expected to be completed by the end of 2027. LSP is the first petrochemical complex in ASEAN to utilise imported ethane from the US as feedstock, which will significantly lower feedstock cost by more than 30% compared to the current naphtha price.

A consortium of China Tianchen Engineering Corporation and PetroVietnam Technical Service Corporation, a member of Vietnam Oil & Gas Group (PetroVietnam or PVN), has been selected as a contractor for the two tanks, with a capacity of approximately 55,000 tonnes per tank. These tanks will accommodate 1 million tonnes of ethane per year, the company says.

The LSPE project’s estimated investment is approximately US$500 million, funded by SCG's internal sources. In the past, importing ethane from the US for use in the petrochemical industry faced several limitations, such as constraints in the ethane storage and export capability from the US, the long lead time and specialised construction of VLECs, and securing ethane supply through long-term agreement.

Sakchai Patiparnpreechavud, CEO/President of SCGC,  said: "As SCGC previously announced the project to enhance feedstock flexibility with ethane feedstock, its supply chain to LSP includes: 1) an ethane supply agreement with export terminal, 2) Very Large Ethane Carriers (VLECs), and 3) specifically designed storage tanks for ethane, which has different properties compared to basic LNG and propane. The company has already secured a 15-year long-term ethane supply agreement from the United States and successfully secured the first lot of three VLECs last January.”

"Regarding the 15-year charter agreements for five VLECs to carry ethane from the United States to Vietnam, the charter agreement for the first lot of three vessels has already been signed with Mitsui O.S.K. Lines (MOL), while The charter agreement for the remaining two vessels are currently in progress and are expected to be finalised soon," added Sakchai.

In other news, chemical firm LyondellBasell  has announced an investment to expand propylene production capacity at its Channelview complex near Houston, US. 

Groundbreaking and construction are expected to begin in the third quarter of 2025, with a projected start-up in late 2028. The unit will have a propylene production capacity of approximately 400,0000 tonnes/year, employ 750 people during peak construction and is expected to add 25 permanent jobs.

The new metathesis unit will convert ethylene into propylene for use in the production of polypropylene and propylene oxide, used in product lines including food packaging, medical devices, automotive components, aircraft deicing fluid, building insulation, cushions for home furnishings and telecommunications equipment.

“This capacity expansion strengthens our ability to meet increasing customer demand and improve our self-sufficiency as we grow and upgrade a core business line for LyondellBasell,” said Kim Foley, LYB executive vice president, Global Olefins & Polyolefins and Refining. “Additionally, it reduces our exposure to market volatility, which positions LYB to provide consistent returns for our shareholders.”

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