Siam Cement Public Company (SCG), through its Vietnam-based subsidiary Vina SCG Chemicals, has entered an agreement to acquire all of the 25 per cent holding in Long Son Petrochemicals held by QPI Vietnam Limited, a subsidiary of Qatar Petroleum.
If the transaction goes through, SCG will increase its stake at Long Son from the current 46 per cent to 71 per cent, it said in a filing.
The Vietnamese partner of the petrochemicals complex, energy giant PetroVietnam, holds the remaining 29 per cent.
The share purchase is valued at about $36.1 million.
Located 100 km from Vietnam’s commercial hub Ho Chi Minh City, Long Son is positioned as the country’s first petrochemical development, according to SCG.
“The project possesses competitive aspects ranging from integration, economies of scale, and competitive feedstock flexibility. Non-petrochemical supporting infrastructure such as a deep sea port and other facilities are also included at approximately 30 per cent of the total investment cost,” it said in the filing.
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.
It was said earlier this year that SCG was searching for other partners to work on resuming the $4.5 billion petrochemical complex.
Completion of the project is expected in 2021.
Long Son is a one million tonne ethylene cracker with flexible gas and naphtha feed to yield in total olefins capacity of up to 1.6 million tonnes per year depending on the feedstock mix. The olefins cracker is equipped with high flexibility to utilise gas up to 80 per cent, 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.