Investor of Long Son Petrochemical project of 5 billion USD reveals plan to re-operate

The Long Son petrochemical project, with a total investment of $5 billion, had to cease commercial operation after a short period of operation. The investor has spoken out about the possibility of the plant resuming operations.

Mr. Kulachet Dharachandra, General Director of Long Son Petrochemical Company Limited, said that the Long Son Petrochemical Complex will be renovated to reduce production costs. - Photo: DONG HA

On February 13th, Mr. Kulachet Dharachandra, General Director of Long Son Petrochemical Company Limited (LSP), a member of SCG Group (Thailand), spoke about the reasons for temporarily suspending commercial operation of the $5 billion Long Son petrochemical complex at the end of 2024 and the roadmap for restarting the project.

Mr. Kulachet Dharachandra stated that the Long Son petrochemical plant had to temporarily suspend commercial operation after a short period of operation due to unforeseen market issues.

In particular, the global economic downturn has impacted the demand for plastic resins, a key product of the petrochemical industry. Currently, the price of plastic resins has fallen sharply, more than $1,000 per ton lower than before, while input costs have increased in line with crude oil prices, leading to reduced profits.

According to him, the difference between the selling price of plastic pellets and the cost of raw materials has decreased sharply, to about $300/ton, much lower than the peak period (around $700/ton), and at times this difference was even lower than the break-even point.

In addition, geopolitical tensions and trade wars have also had a significant impact on the petrochemical industry.

"Currently, the petrochemical industry in the region and globally is in the 'winter' phase, which is the most difficult stage of the industry's downturn cycle, with low prices and record-low profits. Therefore, LSP has decided to temporarily suspend commercial operations to preserve assets, ensure liquidity, and prepare for restarting when the market recovers," said Kulachet Dharachandra.

The Long Son petrochemical complex, with a total investment of up to $5 billion, is currently temporarily suspending commercial operations - Photo: SCG

A representative of the investor stated that the plant is always ready to resume operations when market demand increases again, profit margins improve, and crude oil prices cool down thanks to policies of the US President Donald Trump's administration.

Mr. Kulachet Dharachandra revealed that the "game-changing factor" for this $5 billion petrochemical plant is increased flexibility in feedstock. The plant is designed to use up to 70% natural gas as its feedstock.

Therefore, LSP will switch its feedstock, increasing the use of imported ethane from the US at a lower price than naphtha and propane, thereby reducing production costs and carbon emissions.

To renovate LSP, Mr. Kulachet Dharachandra said the company will invest an additional $500 million to build a dedicated storage tank and renovate the plant, with construction expected to take 2.5 years and be completed in 2027.

The Long Son petrochemical complex is invested in by SCG Group with a total investment of 5 billion USD. Of this, domestic spending accounts for 33%, equivalent to 1.5 billion USD. From 2018 to 2024, this plant paid 163 million USD in taxes and contributed 1.5 billion USD in revenue in 2024. Currently, the plant has 1,000 employees, 88% of whom are Vietnamese.

Source: https://tuoitre.vn/chu-dau-tu-hoa-dau-long-son-5-ti-usd-tiet-lo-ke-hoach-tai-van-hanh-20250213231931769.htm