SCG-backed $5.4 bln petrochemical complex restarts operations in southern Vietnam

The $5.4 billion Long Son Petrochemicals (LSP), invested by Thai conglomerate Siam Cement Group (SCG), has resumed full operations at its integrated petrochemical complex in southern Vietnam, as operating margins improve following recent declines in crude oil prices.

"While global market conditions remain challenging, this restart reflects LSP’s proactive approach to seize an operational window while maintaining ongoing assessment of market movements," LSP stated in a release on Wednesday, after a nearly one-year hiatus.

In parallel, the company is progressing with the LSP Enhancement (LSPE) Project, a $500 million investment scheduled for completion in 2027.

This strategic initiative will incorporate ethane into the existing naphtha and propane feedstock mix, aiming to cut operating costs by over 30%, lower greenhouse gas emissions, and enhance long-term competitiveness and sustainability.

While industry conditions remain uncertain, LSP will focus on operating safely and efficiently, supporting its workforce, and collaborating closely with stakeholders, according to the company.

"Backed by strong government and parent company support, LSP remains committed to contributing to Vietnam’s industrial self-sufficiency and sustainable economic growth," it added.

Key components of the LSPE project include importing 1 million tons per annum of ethane from the U.S, utilizing five 50,000-ton Very Large Ethane Carriers (VLECs) for transportation, constructing two cryogenic ethane storage tanks with a capacity of 55,000 tons each, and upgrading facilities to enable up to 70% ethane usage, while maintaining feedstock flexibility with naphtha and propane.

Kulachet Dharachandra, general director of LSP, said: “The petrochemical market in the second half of the year remains volatile and highly competitive. However, the slight improvement in product-to-feedstock spreads, driven by softer crude oil prices, provides an opportunity to restart and confirm our operational readiness. This decision ensures we remain engaged with customers and supply chains.”

LSP was initially located in Ba Ria-Vung Tau province, which was recently merged with neighboring Ho Chi Minh City and Binh Duong province to form the new HCMC.

The plant had a total designed capacity of 1.4 million tons of plastic resins and various other plastic products annually. At full capacity, LSP was expected to generate $1.5 billion in annual revenue and contribute approximately $150 million to the state budget.

However, just 15 days after commencing operations on September 30, 2024, the facility suspended production due to broader market challenges. LSP stated that operations would resume once profit margins improve.

In February, SCG announced an additional investment of $500 million to upgrade the facility. The plan included incorporating ethane into the existing naphtha and propane feedstock mix.

In the first half of 2025, SCG posted revenue of THB22.4 billion ($688.8 million) in Vietnam, accounting for 9% of its global total, making the country its second-largest market.