Vietnam may finally get its first ethylene cracker.
Siam Cement says it will proceed with the construction of Long Son Petrochemicals, a $5.4 billion chemical complex in the south of Vietnam, about 97 km from Ho Chi Minh City. The venture plans to award building contracts before the end of the year.
Scheduled to come on-line in 2022, Long Son will feature an ethylene cracker with an annual production capacity of 1 million metric tons. Using feedstocks including locally sourced ethane and imported naphtha and propane, the complex will produce basic plastics such as polypropylene and polyethylene.
About 30% of the investment will go to build infrastructure including a deep sea port. The project will be owned 71% by Siam Cement, a big Thai chemical maker, and 29% by state-owned PetroVietnam. Qatar Petroleum once expressed interest in being part of the project but later dropped out.
Over the past two decades Vietnam has repeatedly invited international companies to build oil refineries integrated with petrochemical complexes. Starting in the mid-90s, companies including Total, Petronas, and LG all tried to launch such a project in central Vietnam. The refinery eventually opened in 2009—minus the petrochemical complex.
Siam Cement’s decision to go ahead with Long Son comes as a consortium of Idemitsu Kosan, Kuwait Petroleum, PetroVietnam, and Mitsui Chemicals gets ready to open the country’s second refinery. Located in northern Vietnam, the $9 billion project will produce refinery-derived chemicals but no ethylene.
According to Asian Development Bank, Vietnam’s economy has been growing at an average rate of 5.9% per year since 2012. In 2016, Vietnam imported 2.3 million metric tons of basic polyolefin plastics, Siam Cement claims.