Thai investor proposes additional US$1.4 billion for refinery
A Thai consortium in charge of the 464-hectare Long Son Petrochemicals Complex, located in Ba Ria-Vung Tau, wants to raise its charter capital from US$3.7 billion to US$5.1 billion to upgrade the refinery’s technology and improve its capacity.
A view of the wholly-Thailand-invested Long Son Petrochemicals Complex, located in the southern province of Ba Ria-Vung Tau. It is now scheduled for commercial operations in late 2022 – PHOTO: LSP
The Ministry of Planning and Investment is seeking the approval of Prime Minister Nguyen Xuan Phuc on behalf of the consortium of Long Son Refining and Petrochemical JSC, owned by Vina SCG Chemicals Co., Ltd (VSCG) and Thai Plastic and Chemicals PLC (TPC).
It is now possible to consider a change in technology and hikes in capacity and investment capital at the refinery, the ministry noted in a report.
The capital hike is intended to raise competitiveness and economic efficiency, thanks to technological adjustments and capacity increases.
The ministry stated that VSCG and TPC have yet to ensure their ability to raise the fund. However, their holding company, Bangkok-based Siam Cement Group Public Co., Ltd (SCG), can offer sufficient financial support.
The consortium plans to borrow 60% of the total investment, at some US$3 billion, to execute the project. So far, the legal entity, Long Son Refining and Petrochemical JSC, has signed loan contracts worth some US$3.2 billion with six banks from Thailand, Japan and Singapore.
If the prime minister approves the proposal, the Department of Planning and Investment of Ba Ria-Vung Tau Province will have to supervise the project’s investment capital, especially capital contributions from the consortium, stressed the ministry.
The Thailand subsidiary of SCG also proposed delaying the commercial operations of the refinery until the end of 2022 rather than launching it in the first half of that year. As of July this year, the project was roughly 19.7% complete.
SCG President and CEO Roongrote Rangsiyopash said at a groundbreaking ceremony for the project in August 2018 that the Long Son refinery will enhance the competitiveness of SCG’s chemicals business in Southeast Asia.
Moreover, it will be equipped with world-class advanced technologies to create better products, services and solutions for customers, Rangsiyopash added.
In 2013, SCG held a 28% stake in the project, while the remainder belonged to Qatar Petroleum, the Vietnam Oil and Gas Group (PVN) and the Vietnam National Chemical Group.
Four years later, SCG increased its stake in the project to 71%, while its local partner PVN held the remaining 29%, as the other investors had withdrawn from the project. It was not until mid-2018 that the SCG secured approval from the prime minister to acquire PVN’s entire stake.
The Long Son Petrochemicals Complex in Long Son Commune of Vung Tau City was first launched in 2008 and scheduled for completion in 2012. However, it fell behind schedule, due to slow site clearance and a change of partners.
The finished complex will be able to produce 1.6 million tons of olefin, in addition to high-density polyethylene, linear low-density polyethylene and polypropylene.
SCG pledged to operate the complex efficiently while complying with regulations on environmental protection and paying attention to local workers’ well-being. SGT
SCG, a Thai-owned Southeast Asian conglomerate, reported a turnover of approximately US$1 billion in the Vietnamese market in the first nine months of this year, a slight decrease from the same period last year.
Cars from Thailand and Indonesia accounted for the majority of cars imported between January and September this year.