14:16 | 19/04/2019 Energy
The government has recently ordered the Ministry of Natural Resources and Environment to "quickly" appraise the Long Son Petrochemical (LSP) complex project.
|Thai conglomerate Siam Cement Group is the sole operator of the Long Son Petrochemical complex in southern Vietnam - Photo by Reuters|
At $5.4 billion, LSP will be Vietnam’s first integrated petrochemical project. To be built in Ba Ria-Vung Tau Province, 100 kilometers to the southeast of Ho Chi Minh City, it will have a capacity of 1.6 million tons of olefins a year. Olefins are high-density synthetic fibers.
Roongrote Rangsiyopash, SCG chairman and CEO, told Prime Minister Nguyen Xuan Phuc at a meeting last month that his company would complete the project in time and begin commercial operations in 2023.
LSP was conceived as a joint venture between SCG, the state-run PetroVietnam and Qatar Petroleum in 2008. Due to the global recession, the project stalled, and the Qatari partner withdrew in 2015 with SCG buying its stake in 2017.
Last year SCG also bought PetroVietnam’s 29 percent stake to become the sole owner. Permission for the project had been given to PetroVietnam, but following its pullout, SCG needs to get fresh approval.
Last August SCG obtained loans of $3.2 billion from a syndicate of six banks for the project.
The delay has taken the estimated cost up from $4.5 billion to $5.4 billion but SCG still believes it is a "very competitive price when compared to other projects globally." The construction of the plant is set to create 20,000 jobs.
SCG has been investing in Vietnam since 1992 in many sectors such as cement, construction materials, packaging, and petrochemicals. Its revenues in the country were almost VND31 trillion ($1.33 billion) last year after rising by 20 percent from 2017.