Global financial crisis casts shadow on Vietnam’s mega petrochem complexes

A shadow has been cast on plans by Vietnam to construct two world-scale petrochemical complexes by 2013. The financial crisis that led to the global economic meltdown has impacted the company’s ability to secure multi-billion dollar funding. This will be huge setback for the domestic petrochemical industry that is currently too miniscule to meet demand. Last year the absence of oil refining capacity made Vietnam a net exporter of crude oil and importer of 270,000 bpd of refined products. The US$2.5 bln Dung Quat complex, the country’s first oil refinery is scheduled to commence operations in Q2-09. Refining capacity will include 130,000 bpd of diesel, gasoline, jet fuel, liquefied petroleum gas (LPG) and propylene. The Vietnam Oil and Gas Group (PetroVietnam) is constructing a petrochemical complex in the Dung Quat economic zone, which will have the capacity to produce 260,000 tpa propylene feedstock for a 150,000 tpa PP plant. The entire complex is due to be operational by 2010. The other two projects in the pipeline include the Nghi Son Refinery and Petrochemical complex with capacities of 150,000 tpa of propylene, benzene and polypropylene each, 480,000tpa of paraxylene. The complex is scheduled to come onstream in 2013 along with the Long Son Petrochemical complex with capacities of 1.1 mln tpa of ethylene, 550,000 tpa of propylene, 400,000 tpa of VCM, 330,000 tpa of PVC and 1.45 mln tpa of polyolefins. The complexes would supply key industries in the country, particularly the automotive and consumer goods packaging sectors, as well as exports to other South East Asian markets. However, under the current financial scenario, doubts envelop the viability of the Nghi Son and Long Son projects.
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