UPDATE: SCG invests $700 million in Vietnam’s LSP ethane enhancement project

SINGAPORE (ICIS)–Thailand’s Siam Cement Group (SCG) will invest $700 million to pave the way for Vietnam’s first integrated petrochemical complex to use US ethane as feedstock for production.

• Project completion slated in end-2027
• Ethane to account for as much as two-thirds of LSP cracker feedstock
• Bulk of investments go toward handling/storage of ethane

The project, which will mean increased feedstock diversification for its wholly owned Vietnamese subsidiary Long Son Petrochemicals (LSP), is expected to be completed by the end of 2027, SCG said in a bourse filing on 30 October.

LSP is currently working with Vietnamese authorities to acquire necessary certificates and permits to build storage and supporting facilities at the complex in Bah Ria-Vung Tao province in southeastern Vietnam.

The cracker at the site can produce 950,000 tonnes/year of ethylene, 400,000 tonnes/year of propylene, and 100,000 tonnes/year of butadiene (BD).

Once the ethane enhancement project is completed, LSP will be able to utilize ethane for as much as two thirds of its total feedstock, in addition to propane and naphtha.

By utilizing imported ethane from the US as raw material, “LSP can significantly enhance its competitiveness through lower feedstock cost and flexibility, while also lowering carbon emissions”, SCG said.

Majority of the investment will go toward handling and storage of the ethane feedstock, which requires temperature as low as minus 90-degree Celsius, it said.

LSP was completed at a cost of $5.2 billion whose commercial operations began on 30 September 2024 “following a comprehensive test period”, SCG said.

The Thai conglomerate first announced the plan to use US ethane as feedstock for LSP in September, noting that over the past three years, its average price has been lowered by around 40% compared with those of naphtha and propane.

Most crackers in Asia use naphtha as feedstock whose prices track highly volatile upstream crude movement.

“In light of the existing petrochemical trough with historical low margin, and current volatile global economic environment, LSP is closely monitoring the market situation and will adjust the run rate of its operation during this challenging period for petrochemical business,” SCG said.

Focus article by Pearl Bantillo

(adds details throughout)

Initial reporting by Fanny Zhang

Thumbnail image: Container cargo ships unload at a port in Hai Phong, Vietnam on 25 May 2015. (Minh Hoang/EPA/Shutterstock)