SIAM Cement Group (SCG) is reportedly keen to take on full ownership of a project for the development of a multibillion-dollar petrochemicals complex in Vietnam.
SCG wants to buy the entire stake of a joint venture partner, Vietnam Oil and Gas Group (PVN), in the Long Son Petrochemicals (LSP) complex in the southern province of Ba Ria-Vung Tau, a report said.
The potential move is among proposals that SCG had sent to Vietnamese Prime Minister Nguyen Xuan Phuc, online newspaper ndh.vn reported. The proposal is said to come with some conditions relating to the implementation of the project, ndh.vn said.
The proposal was reportedly sent after PVN had difficulty arranging its loan portion in the joint venture and in procedures for approving bidding packages. This has a direct impact on the progress of the engineering procurement and construction (EPC) contract and as well as the project. Therefore, the bidding package has had to be extended many times since Long Son Petrochemical Company Limited approved the results regarding the selection of EPC contractor in early July last year.
If this proposal is approved by the prime minister, SCG will own 100 per cent of the US$5.4 billion petrochemical project.
LSP Complex was licensed in 2008 with investment capital of US$3.7 billion and the participation of PVN, Vietnam National Chemical Group and SCG. After many difficulties, Vinachem withdrew the capital and was replaced by Qatar Petroleum International (QPI). In April 2017, QPI also decided to withdraw all capital at LSP and transferred the amount of stake to SCG. As a result, SCG’s capital in LSP increased from 46 per cent to 71 per cent.
Initially, the project had an investment of about US$3.7 billion, which was increased to more than US$4 billion, and finally to the current investment of US$5.4 billion. Long Son is the third petrochemical complex in Vietnam, following Dung Quat oil refinery and Nghi Son oil refinery and petrochemical complex.
LSP is a key petrol and oil project of the Vietnamese government. It is designed to have a capacity of 1.6 million tonnes of olefin per year. Located on 464 hectares in the LSP Industrial Park, the project is expected to be operational by 2022.
During the construction process, the project is expected to create some 15,000 to 20,000 jobs. Once complete, it will create more than 1,000 jobs and is estimated to contribute some $115 million a year to the Vietnamese budget.