Siam Cement's Vietnamese subsidiary to buy additional 25% stake in Long Son Petrochem

06-Mar-17

Siam Cement Public Company (SCG), through its Vietnam-based subsidiary Vina SCG Chemicals, has entered an agreement to acquire an additional 25% stake in Long Son Petrochemicals for about US$36.1 mln. This was the 25% holding held by QPI Vietnam Limited, a subsidiary of Qatar Petroleum. Subject to approvals, SCG will increase its stake at Long Son from the current 46% to 71%, it said in a filing. The Vietnamese partner of the petrochemicals complex- PetroVietnam, holds the balance 29%.

Licensed in 2008, the joint venture had earlier plan to commence construction in 2014 with commercial operation slated for 2017. However, the project was delayed reportedly due to site clearance issues, and the Qatar company looked to exit the JV. Completion of the project is expected in 2021. Long Son is a 1 mln ton ethylene cracker with flexible gas and naphtha feed to yield in total olefins capacity of up to 1.6 mln tpa depending on the feedstock mix. The olefins cracker is equipped with high flexibility to utilise gas up to 80%, of total feedstock, for cost optimisation and will be fully integrated to the downstream polyolefins (PE / PP) capacities of similar scale. The project will be financed through a combination of equity and debt.