SGCG Chemicals (SCGC), a subsidiary of Thailand’s Siam Cement Group (SCG), is making significant strides in its $500 million expansion of the Long Son Petrochemicals (LSP) complex in Vietnam, marking a pivotal moment in the region's petrochemical industry. The company has announced the commencement of construction preparations for specialized ethane storage tanks, a crucial component of its strategy to enhance feedstock flexibility and reduce costs.

LSP has finalized an Engineering, Procurement, and Construction (EPC) contract with a consortium comprising China Tianchen Engineering Corporation (TCC) and Petrovietnam Technical Service Corporation (PTSC), a member of Vietnam Oil & Gas Group (PetroVietnam or PVN), for the construction of these cryogenic ethane storage tanks. The tanks, each with a capacity of approximately 55,000 tons, are designed with full containment, featuring a double-walled structure with an outer concrete wall and roof, and an inner wall made of special-grade metal. This sophisticated design is essential for safely storing ethane at temperatures as low as -90 degrees Celsius, ensuring the integrity and safety of the stored feedstock. The construction of these tanks is projected to be completed by the end of 2027.

This expansion is a key strategic move for SCGC, as LSP is poised to become the first petrochemical complex in ASEAN to utilize imported ethane from the United States as feedstock. This shift is expected to significantly lower feedstock costs by more than 30% compared to the current naphtha prices, bolstering LSP’s competitiveness in the global market.

The company has also secured a 15-year charter agreement for five VLECs to transport ethane from the United States to Vietnam. The charter agreement for the initial three vessels has been finalized with Mitsui O.S.K. Lines (MOL), and agreements for the remaining two vessels are in progress.

Sakchai Patiparnpreechavud, Chief Executive Officer & President of SCGC, said, "This project to enhance feedstock flexibility with ethane feedstock includes an ethane supply agreement with export terminal, Very Large Ethane Carriers (VLECs), and 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.”

The LSP complex, located in Ba Ria-Vung Tau province, represents a substantial investment by SCG, with the initial $5.2 billion phase having commenced commercial operations in September 2024. The complex aims to produce 1.4 million tons of polyethylene and polypropylene annually at full capacity.