Thailand SCG Chemicals signs 15-year ethane supply deal for Long Son Petrochemicals complex in Vietnam

SCG Chemicals (SCGC), under Thailand’s giant Siam Cement Group (SCG), has signed a 15-year ethane supply contract to provide feedstock for its Long Son Petrochemicals (LSP) complex in Vietnam.

In a recent filing with the Stock Exchange of Thailand (SET), SCG said SCGC and Enterprise Products Partners L.P. signed the contract via their subsidiaries.

The U.S. partner, also a leading ethane supplier, will provide ethane from the United States per free on board (FOB) basis for LSP complex. The amount is one million tons per year for 15 years.

SCGC and Japan’s Mitsui O.S.K. Lines, Ltd., a leading shipowner of LNG carriers, signed a long-term time charter agreement for three out of five very large ethane carriers (VLECs) for the delivery of ethane from the United States to Vietnam. The Japanese partner will provide 15-year logistic service for the ethane transportation.

SCG also updated that the ethane addition of LSP complex is set to complete by end-2027. Currently, the complex runs with propane and naphtha as feedstock.

The $5.2 billion LSP is SCG’s biggest investment in Vietnam. It commenced land preparations for the complex in the southern province of Ba Ria-Vung Tau in 2018, started up all utilities in 2022, and conducted a full complex test run in December 2023.

LSP began its commercial operation (COD) in September 2024, with an initial production output of 74,000 tons during the trial phase. At full capacity, the complex’s annual output will include 1.4 million tons of polyethylene and polypropylene.

In November 2024, SCG said it would invest an extra $700 million in the $5.2 billion LSP to diversify its production. The group said it will utilize ethane imported from the United States as raw material for the complex. The project can significantly enhance its competitiveness through lower feedstock cost and flexibility and lower carbon emissions.