Construction start of Vietnam’s first petchem project delayed
Previously, the parties, PetroVietnam with a share of 29% and Thailand’s Siam Cement Group (SCG) with a share of 71% in the project, planned to borrow $3.2 billion from financial institutions and benefit from their own equity capitals for the remaining cost in order to finance the$5.4 billion project.
Accordingly, SCG pledged to provide a guarantee for the $3.2 billion package but it asked PetroVietnam to issue a commitment to Long Son Petrochemicals, guaranteeing the 29% portion of the $3.2 billion the Thai partner will borrow on its behalf.
However, PetroVietnam could not provide a loan guarantee for the project since there is a legal prohibition in the country that does not allow a state-owned enterprise to make a loan guarantee for a subsidiary holding less than 51% share in order to prevent a rise in public debt.
It is reported that if the issue is solved, the construction will begin in August or September and the complex is expected to be operational in 2021-2022. Once the project is completed, the complex will house a 1 million tons/year ethylene cracker with flexible gas and naphtha feed to yield in total olefins capacity of up to 1.6 million tons/year depending on the feedstock mix. The olefins cracker will be fully integrated to the downstream polyolefins (PE / PP) capacities of similar scale.
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