SCGC to import ethane from US for Long Son Petrochemicals complex

SCGC to import ethane from US for Long Son Petrochemicals complex

SCG Chemicals (SCGC) announced progress on March 18 on a plan to enhance feedstock flexibility by utilising ethane at the Long Son Petrochemicals (LSP) complex.

The company has signed a 15-year charter agreement for two additional Very Large Ethane Carriers (VLECs) to transport ethane from the Untied States to Vietnam, bringing the total to five vessels as planned, and securing long-term transportation of one million tonnes of ethane per year.

SCGC has reaffirmed its commitment to accelerating the project, confident that using ethane as an alternative feedstock will enhance LSP’s cost competitiveness while being more environmentally friendly by reducing greenhouse gas emissions. The project is expected to be completed by the end of 2027, aligning with the anticipated recovery of the petrochemical market in the region.

Sakchai Patiparnpreechavud, CEO and president of SCGC, said, “SCGC has signed a long-term time charter agreement for two additional VLECs with Mitsui O.S.K. Lines, Ltd. (MOL), a global liquified natural gas carriers’ shipowner, through its subsidiaries. This agreement increases the total fleet to five vessels, following the initial three secured in January 2025. Under the agreement, MOL group will transport ethane from the US to Vietnam for 15 years. The expansion of the VLECs fleet aligns with the LSP's supply chain strategy to boost operational efficiency and reduce long-term transportation risks.”

The ethane supply chain for the LSP plant is now fully established, comprising the ethane supply agreement and export terminal; time charter agreements for five VLECs; and the engineering, procurement, and construction of feedstock storage facilities specifically designed for ethane. The company has now completed all these steps and is ready to accelerate to the next phase.

“The project has an estimated investment of approximately $500 million sourced from SCG’s internal funding, with the majority allocated to feedstock storage tanks construction. The plant was already designed with gas feedstock flexibility, allowing us to immediately modify the plant to receive ethane as a feedstock. The LSP plant in Vietnam is the first in ASEAN to utilise ethane from the US as a feedstock, which will significantly reduce costs by over 30 per cent compared to current naphtha prices,” Patiparnpreechavud noted.

VIR