Investors sign JV agreement for 1.4Mta olefins complex, with investment decision expected in 2013 and commercial operations expected four to five years post groundbreaking.

Siam Cement Group (SCG), Thai Plastic and Chemicals, QPI Vietnam (a subsidiary of Qatar Petroleum International), PetroVietnam and Vinachem have signed a joint venture agreement to invest in Vietnam’s first petrochemicals complex. SCG announced the signing in a statement to the Stock Exchange of Thailand.

A final investment decision is expected in 2013 and commercial operation of the US$4.5 billion project is expected to occur four to five years after the start of construction.

As part of the deal, Qatar International Petroleum Marketing (the exclusive marketer of regulated products from Qatar), signed a long-term feedstock agreement to supply the project’s cracker with propane and naphtha, while PV GAS (a subsidiary of PetroVietnam) signed a memorandum of understanding to supply the complex with ethane.

The project, which will be located on Long Son island, in southern Vietnam, will have an olefins production capacity of 1.4Mta. It will employ a flexible cracker able to utilise ethane, propane and naphtha as feedstock. Supporting infrastructure will include storage facilities, port, jetty, power plant and other utilities. According to the statement, the cracker will be fully integrated with downstream production units, allowing the manufacturing of various downstream products including polyethylene, polypropylene and vinyl chloride monomer. SCG expects the majority of these products to be sold on to the domestic market.

The full statement can be seen here