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Siam Cement, Petrovietnam to build petrochem complex


July 22, 2008

Siam Cement, Petrovietnam to build petrochem complex

Vietnam government has licensed state-run Petrovietnam and Thai industrial conglomerate Siam Cement to build a $3.77-billion petrochemical complex, state media reported on Monday.

The Long Son Petrochemical Co. Ltd. plant is scheduled to be built in southern Ba Ria-Vung Tau province, east of Ho Chi Minh City, and is set for completion in 2013, the Dau Tu (Investment) newspaper reported.

The license was granted to two units of Siam Cement -- Vina SCG Chemicals and Thai Plastic and Chemicals, which would together own 71 percent -- with Vietnam Oil and Gas Corporation (PetroVietnam) and the Vietnam National Chemical Corp holding the rest, the report said.

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The plant will be close to a refinery Vietnam plans to build at Long Son -- its third after the central Dung Quat refinery, which is due to go online next year. A northern Japanese-Kuwaiti refinery is to start operating in 2013.

The petrochemical complex will be built in the southern province of Ba Ria-Vung Tau for completion in the second quarter of 2013 at a total cost of $3.77 billion. The project's registered capital is $1.51 billion, the paper said.

Siam Cement subsidiaries would own 71 percent of the complex, and the two Vietnamese firms would hold the rest, Siam Cement said in a letter to the Thai stock exchange in March.

Construction will be in six phases and the complex will serve as the foundation for the development of Vietnam's petrochemicals and plastics industries, the Dau Tu newspaper said.

Siam Cement has said the plant will be built close to Long Son refinery, Vietnam's third such plant after Dung Quat and Nghi Son, and will supply other domestic industries such as automotive, consumer goods packaging and aluminium.

The Siam Cement group has invested in Vietnam since 1990 and has petrochemicals, paper, ready-mixed concrete, building materials and distribution businesses there. SCG Paper said last month it was eyeing more acquisitions of paper firms in Vietnam.

Vietnam has not finalised a deal with Venezuela's PVDSA to build a $7 billion, 240,000 barrel-per-day Long Son refinery. That project has attracted strong interest from foreign firms as it is located close to an area of high consumption in the Mekong Delta and industrial parks around Ho Chi Minh City.

Petrovietnam is speeding up construction of its 140,000-bpd Dung Quat refinery, the country's first, so as to start operation in February 2009 as agreed with the government, after many delays.

The group and Japanese refiner Idemitsu  and Kuwait Petroleum International are also building Vietnam's second refinery, the $6 billion 200,000-bpd Nghi Son plant, in the country's north for completion slated for 2013.

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