On February 24, the Southern Petrochemical Complex ((Long Son Petrochemicals – LSP) with total investment capital of 5.4 billion USD held the ground-breaking ceremony in Ba Ria – Vung Tau province, this is the first petrochemical complex. in Vietnam with a capacity of up to 1.6 million tons/year, capable of replacing imported polyolefins, the project also includes other infrastructure besides the petrochemical production complex, deep water port.
Roongrote Rangsiyopash, Chairman of the Board of Directors of SCG Group, said that this is a key project in the company’s expansion strategy in ASEAN, with Vietnam being the focus. SCG believes that the project will encourage long-term investment in relevant industries in the value chain, as well as raise the standard of product competitiveness, thereby reducing the need to import petrochemical products.
Speaking at the groundbreaking ceremony, Prime Minister Nguyen Xuan Phuc emphasized that Ba Ria – Vung Tau is “a locality that fully meets the conditions of “natural time, terrain, and human harmony”” to deploy large-scale projects in oil refining and petrochemicals. , petroleum processing. The implementation of the project also concretizes the policy on strategic orientation for the development of Vietnam’s oil and gas industry to 2025, with a vision to 2035, promoting the refining and petrochemical industry, serving the country and exporting.
The Prime Minister set many requirements with the investor, assigning specific tasks to the National Oil and Gas Group and Ba Ria – Vung Tau province, to ensure the project is completed and operated on schedule, because this project it’s been a while for the past 10 years.
For the investor, the head of the Government requires to ensure the schedule, apply modern science and technology in the project manufacturing process to operate in absolute safety. During the construction of the project, they must commit to comply with regulations on protection of the natural and social environment. Along with that is preserving the traditional culture of local people and restoring natural forests in this area, for sustainable and long-term development.
The project is expected to create about 15,000-20,000 jobs during construction and more than 1,000 highly-skilled workers when it comes into commercial operation.
The project is also estimated to contribute 60 million USD/year to the national budget during 30 years since it came into operation.
Licensed in July 2008, Long Son petrochemical complex has a total investment of 3.77 billion USD, then increased to 4.5 billion USD and finally 5.4 billion USD.
At the time of 2008, the investor was Long Son Petrochemical Company Limited – a joint venture between SCG Group (53%), Thai Plastics and Chemicals Company under SCG (18%), National Petroleum Corporation Vietnam – PVN (18%) and Vietnam Chemical Group – Vinachem (11%).
Then Vinachem divested, at the same time Qatar Petroleum International joined by acquiring 25% stake from SCG. Attached is a contract to supply raw materials for the operating plant, which Qatar Petroleum is the supplier. Previously, in 2009, this group also signed a framework agreement with SCG to invest in the project.
However, 3 years after the capital contribution, Qatar Petroleum International suddenly announced its withdrawal from the project, forcing SCG to buy back 25% of it for about $36 million (about 1,300 million baht).
Currently, SCG holds 71% of capital in Long Son Petrochemical Company Limited (LSP) – an enterprise established to implement the Southern Petrochemical Complex Project.
The proposal to buy back the contributed capital of PVN was made after 9 months from the time when SCG and PVN signed again the Joint Venture Contract and the Company’s Charter to officially become 2 major investors in the project. Southern Petrochemical Complex (end of March 2017).
EPC contractors (General Contractors) in the Long Son Petrochemical project complex (LSP) have been going to Vung Tau and Long Son to prepare facilities (including office rental, premises, warehouses, personnel). , equipment, machinery) and looking for subcontractors, preparing to deploy EPC. I summarize the scope of work and the list of contractors as follows:
1. LIST OF EPC CONTRACTORS
1/ Technip (Malaysia) + SK (Korea): EPC NM Olefins (Package/Package A)
2/ Posco E&C (Korea) + PVC MS (Vietnamese): Tank Farm
And piping system (Package A2)
3/ Samsung E&C (Korea) + Linde (Germany): HDPE
(Package 😎)
4/ Samsung E&C+ Linde (Germany): PP factory
Linde to build ASU gas plant (Package C )
5/ Toyo (Thailand) + MESS (Japan): LLDPE
(Package D)
6/ Posco E&C (Korea): Wharf system
(Package F)
7/ Hyundai (Korea): Utility
(Package G)
8/ Hanwha (Korea) – power plant (1)
(Package H – canceled)
9/ Posco E&C (Korea) – general construction contractor (Package L – SLMB)
10/ Construction of residential area: bidding
(Package H&I)
2. OTHER CONTRACTORS
11/ Technology copyright: Shaw, Technip, Linde, KBR
12/ Main contractors for automation systems (MAC): Honeywell, Yokogawa, Emerson, ABB, Invensys
13/ Electrical system contractors: ABB, Siemens
14/ Registration: LR, VR, DNV GL, BV, ABS
15/ Construction insurance: PVI, international
16/ Management consulting contractor (PMC): SNC Lavalin
17/ Raw material supplier: Qatar Petroleum/Shell
18/ Main subcontractors:
a. Korea: Daelim, GS
b. Vietnam (construction): PTSC, Alpha ECC, DOBC, Lilama, Toyo Vietnam, Technip Vietnam, Posco Vietnam
Secondary NDT inspection: Alpha NDT, PVNDT
Harbor survey: PVE
PVCoating (tube wrap)
19/ Suppliers of materials
a. Vietnam:VPI (anti-corrosion), Hoa Phat (steel), cement
b. Foreign: Posco, Hyundai, Nippon Steel, Mitsui, JFE (steel plate and steel pipe).
20/ Equipment suppliers:
a. Vietnam: POS, Alpha ECC (modules)
b. Overseas: GE, Siemens, MAN, Mitsubishi, Kawasaki, Shin Nippon, Atlas Kopco, Kobelco (rotary equipment)
21/ Provision of public services/services:
Warehouse,Transportation, catering: Cai Mep Port (transshipment), Dong Xuyen Port, Sao Mai Ben Dinh, PTSC Supply Base, Petrosetco/POTS
And many other units will update later.
III. APPROVAL OF INVESTMENT FID
Done since December 2017. Total registered investment: 5.4 billion USD (may have slight changes after completion of EPC)
1. BANK GIVING LOANS
LSP borrowed $3.2 billion from 6 banks, including: Sumitomo Mitsui Banking Corporation, Mizuho Bank, Bangkok Bank, Krung Thai Bank, Siam Commercial Bank and Export-Import Bank of Thailand
2. PROGRESS
Construction items will start to be deployed from November 2019 and synchronized in early 2020. All general contractor packages will be carried out in parallel from the beginning of 2020 to the end of 2022, and will be tested and handed over for transportation. commercial operation in oil by 2023.
The LSP project, during construction, will create 15,000 – 20,000 jobs. After going into commercial operation from the beginning of 2023, LSP will create more than 1,000 jobs and contribute to the national budget about 2,500 billion VND/year during its 30-year operating life.
