SCG Chemicals (SCGC) is propelling its growth strategy in the petrochemical sector with a bold initiative to optimize feedstock usage at its Long Son Petrochemicals (LSP) plant in Vietnam. The company’s Ethane Feedstock Enhancement Project aims to significantly reduce production costs, enhance flexibility in feedstock procurement, and drive environmental sustainability—ultimately positioning SCGC as a key player in a recovering global petrochemical market.

The shift towards ethane as a primary feedstock is a pivotal move for SCGC. By increasing the use of ethane at LSP, SCGC expects to lower production costs while simultaneously reducing greenhouse gas emissions. The initiative also enhances the plant’s ability to access a more flexible and stable feedstock supply, crucial for remaining competitive in the volatile petrochemical market.

At the heart of this ambitious strategy is SCGC’s newly secured long-term agreement with Enterprise Products Partners L.P., one of the leading ethane suppliers in the United States. The agreement ensures a steady supply of approximately 1 million tons of ethane per year for the next 15 years, providing a reliable foundation for the LSP plant’s operations. Additionally, SCGC has partnered with Mitsui O.S.K. Lines (MOL), a global leader in liquefied gas shipping, to secure the logistics necessary for transporting ethane across the globe. The 15-year charter agreement includes three Very Large Ethane Carriers (VLECs), with two additional charters currently under negotiation. This robust logistics arrangement guarantees a seamless supply chain, ensuring the timely delivery of ethane from the United States to Vietnam.

Sakchai Patiparnpreechavud, CEO and President of SCGC, emphasized the importance of the project in positioning the company for long-term success. “Our accelerated efforts to implement the Ethane Feedstock Enhancement Project reflect our commitment to strengthening SCGC’s competitive edge and reducing production costs,” he said. “With our strategic partnerships and investments, we are confident in our ability to capitalize on the upcoming recovery in the petrochemical market.”

The LSP plant, already known for producing high-quality polymers for both domestic and international markets, has been optimized to utilize up to two-thirds of its feedstock from ethane. The remaining feedstock comes from propane and naphtha, further enhancing the plant's operational flexibility and efficiency. This optimization ensures that the LSP plant remains agile, competitive, and responsive to market demands while aligning with SCGC’s sustainability goals.

As part of this transition, SCGC is fast-tracking the construction of specialized ethane storage tanks capable of maintaining the ultra-low temperatures of around -90 degrees Celsius required for ethane. The project’s completion, slated for the end of 2027, coincides with the anticipated recovery of the petrochemical industry in the region, positioning SCGC for long-term growth.

The LSP plant, a cornerstone of Vietnam’s first integrated petrochemical complex, plays a crucial role in reducing the country’s dependency on imported petrochemicals while boosting the domestic industry. Through its Ethane Feedstock Enhancement Project, SCGC is reinforcing the LSP plant’s position as a regional leader in petrochemical production, setting the stage for a more sustainable, cost-efficient, and competitive future.