Updating information on the Long Son Refinery and Petrochemical Project
On February 24, the Southern Petrochemical Complex (Long Son Petrochemicals – LSP) with a total investment of US $ 5.4 billion was organized to start construction in Ba Ria – Vung Tau province. This is the first petrochemical complex in Vietnam, with a capacity of 1.6 million tons/year, capable of replacing the imported polyolefins products. The project also includes other infrastructure besides petrochemical production complex, deep-water port.
Mr. Roongrote Rangsiyopash, Chairman of the Board of Directors of SCG Group, said that this is a key project in this enterprise’s expansion strategy in ASEAN, in which Vietnam is the focus. SCG believes that the project will encourage long-term investment in relevant industries in the value chain, as well as improve 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 meets the conditions of ” Timing, geography favoring and peace” to implement large-scale petrochemical projects. , processing oil and gas. The implementation of the project also concretizes the policy of strategic development orientation of the Vietnam Oil and Gas industry to 2025, vision to 2035, boosting the petrochemical industry, serving domestic and export.
The Prime Minister made many requests to 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 works on schedule because this project has been in delay for the last 10 years
For the investor, the head of the Government is required to ensure on schedule, apply modern science and technology in the process of manufacturing projects to operate absolutely safely. During the construction process, the project must commit to comply with the regulations on protecting the natural environment 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, more than 1,000 highly-skilled workers when going into commercial operation.
The project is also estimated to contribute USD $ 60 million per year to the national budget during the 30 years since it goes to operate.
Licensed in July 2008, Long Son petrochemical complex has a total investment of 3.77 billion USD, after it increases to 4.5 billion USD and finally 5.4 billion USD.
As of 2008, the investor is Long Son Petrochemical Company Limited – a joint venture between SCG Group (53%), Thailand Plastics and Chemicals Company of SCG (18%), and PetroVietnam Group in Vietnam – PVN (18%) and Vietnam Chemical Group – Vinachem (11%).
Vinachem then divested, at which time Qatar Petroleum International joined in by acquiring a 25% stake from SCG. Accompanied by a contract to supply raw materials to the operating plant of which Qatar Petroleum is the supplier. Previously, in 2009, the Group also signed a framework agreement with SCG to invest in the project.
However, three years after the capital contribution, Qatar Petroleum International suddenly announced its withdrawal from the project, forcing SCG to buy 25% for a value of about US $ 36 million (about 1,300 million Baht).
Currently, SCG holds 71% 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 SCG and PVN signed the joint venture contract and company charter to officially become 2 major investors in the project. Southern Petrochemical Complex (late March 2017).
EPC (General Contractor) contractors in the Hoa Son Long Son project complex (LSP) have been going to Vung Tau and Long Son to prepare facilities (including office, ground, warehouse and personnel hire). , equipment, machinery) and search for subcontractors, preparing to deploy EPC. I summarized the scope of work and the list of contractors as follows:
LIST OF GENERAL CONTRACTORS EPC
1/ Technip (Malaysia) + SK (Korea): EPC NM Olefins ( package/ Package A) 2/ Posco E&C (Korea) + PVC MS (Vietnam): Tank Farm And the pipeline system (Package A2) 3/ Samsung E&C (Korea) + Linde (Germany): HDPE (Package 😎 4/ Samsung E&C + Linde (Germany): PP factory Linde works ASU gas plant (Package C) 5/ Toyo (Thailand) + MESS (Japan): LLDPE (Package D) 6/ Posco E&C (Korea): Harbor system (Package F) 7/ Hyundai (Korea): Utility (Package G) 8/ Hanwha (South Korea) – power plants (1) (Package H – canceled) 9/ Posco E&C (Korea) – general contractor for basic construction (Package L – SLMB) 10/ Construction of housing area: bidding (Package H&I)
11/ Technology copyright: Shaw, Technip, Linde, KBR 12/ Main contractors of automation systems (MAC): Honeywell, Yokogawa, Emerson, ABB, Invensys 13/ Electrical system contractors: ABB, Siemens 14/ Register: LR, VR, DNV GL, BV, ABS 15/ Construction insurance: PVI, international 16/ Management consulting contractor (PMC): SNC Lavalin 17/ 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 Inspection of secondary NDT: Alpha NDT, PVNDT Surveying wharves: PVE PVCoating (pipe wrap) 19/ Material Suppliers a. Vietnam: VPI (anti-corrosion), Hoa Phat (steel), cement b. Overseas: Posco, Hyundai, Nippon Steel, Mitsui, JFE (steel sheets and tubes) 20/ Equipment suppliers: a. Vietnam: POS, Alpha ECC (modules) b. Overseas: GE, Siemens, MAN, Mitsubishi, Kawasaki, Shin Nippon, Atlas Kopco, Kobelco (rotary device) 21/ Service provision / public service: Warehousing, logistics, catering: Cai Mep Port (entrepot), Dong Xuyen Port, Sao Mai Ben Dinh, PTSC Supply Base, Petrosetco / POTS
And many other units will update later
III. APPROVAL FOR INVESTMENT FID
Finished in December 2017. Total registered investment: US $ 5.4 billion (possible slight changes after EPC is completed) IV. LOANS BANKS
LSP borrowed 3.2 billion USD from 6 banks, including Sumitomo Mitsui Banking Corporation, Mizuho Bank, Bangkok Bank, Krung Thai Bank, Siam Commercial Bank and Export-Import Bank of Thailand
The construction items will commence in November 2019 and be synchronized in early 2020. All general contractors will carry out in parallel from the beginning of 2020 to the end of 2022 and test run and handover for commercial operation by the beginning of 2023.
The LSP project, during construction, will create 15,000 to 20,000 jobs. After being put into commercial operation from the beginning of 2023, LSP will create over 1,000 jobs and contribute to the national budget of about VND 2,500 billion / year over a 30-year life cycle.