SCGC Prepares to Build Ethane Supply and Storage Facilities for Long Son Petrochemical Complex

SCGC announced the latest progress of the Long Son Petrochemical Complex (LSP) Ethane Feedstock Enhancement Project (LSPE Project) in Vietnam. The project has reached another important milestone and the preparation work for the construction of ethane storage tanks is progressing in an orderly manner.

LSP has signed an engineering, procurement and construction (EPC) contract for ethane storage tanks, which is expected to be completed by the end of 2027.
LSP is the first petrochemical complex in ASEAN to use imported ethane from the United States as a feedstock, which will significantly reduce the feedstock cost by more than 30% compared with the current naphtha price.

Sakchai Patiparnpreechavud, CEO and President of SCGC, said: "SCGC has previously announced projects to increase feedstock flexibility with ethane feedstock. Its supply chain for LSP includes: ethane supply agreements with export terminals, Very Large Ethane Carriers (VLECs), and specially designed ethane storage tanks, which have different characteristics compared to basic LNG and propane. The company has already signed a long-term ethane supply agreement with the United States for 15 years and successfully secured the first three VLECs in January last year."

"Regarding the latest progress, the company has worked hard to hire internationally renowned contractors with extensive experience in large-scale projects to build dedicated ethane storage tanks. Tank construction is another key element of the project. A consortium consisting of China Tianchen Engineering Corporation and Vietnam Petroleum and Natural Gas Group (PetroVietnam or PVN) member Vietnam Petroleum Technology Services Corporation has been selected as the contractor for the two tanks, each with a capacity of approximately 55,000 tons. The tanks can hold 1 million tons of ethane per year. We believe the LSPE project will be completed as planned by the end of 2027. ”

The ethane tanks to be installed at the LSP plant are designed with a fully enclosed double-wall structure, with the outer wall and top made of concrete and the inner wall made of special-grade metal. Each tank has a capacity of approximately 55,000 tons and can safely store ethane at temperatures as low as -90 degrees Celsius. In addition, LSP is also preparing to improve its production process and upgrade supporting facilities to adapt to the feedstock.

Sakchai added: "Regarding the 15-year charter agreement for five VLECs to transport ethane from the United States to Vietnam, the charter agreement for the first three vessels has been signed with Mitsui OSK Lines (MOL), and the charter agreement for the remaining two vessels is currently in progress and is expected to be completed soon."

"The LSPE project is expected to cost an investment of approximately US$500 million, or approximately THB18 billion," concluded Patiparnpreechavud. In the past, importing ethane from the United States for use in the petrochemical industry faced many limitations, such as limited U.S. ethane storage and export capacity, delivery time and specialized construction of VLECs, and securing ethane supply through long-term agreements. However, after evaluating the feasibility of the project, SCGC quickly implemented the project to improve competitiveness and significantly reduce the cost of the LSP plant, preparing for the recovery of the regional petrochemical market."