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SCG Chemicals (SCGC) is advancing the final phase of its feedstock diversification initiative at the Long Son Petrochemicals Complex (LSP) in Vietnam, marking a significant milestone with preparations for the construction of ethane storage tanks now underway.

In its overarching plan, the petrochemical major aims to reduce reliance on naphtha by drawing on United States ethane as an alternative feedstock. Its project comprises three key stages: securing a long-term supply agreement with a US export terminal, finalising charter agreements for ethane transport, and developing specialised storage infrastructure.

The company has already secured a 15-year ethane supply agreement with a U.S. export terminal and successfully acquired three Very Large Ethane Carriers (VLECs) in early 2025.

SCGC has now moved forward with the infrastructure phase, awarding the construction contract to China Tianchen Engineering Corporation and PetroVietnam Technical Service Corporation.  

Speaking to the construction project’s details, the company announced that the tanks would be capable of containing one million tons of ethane in a given year. It added that the project is expected to conclude at the end of 2027.

LSP is poised to become the first Southeast Asian petrochemical complex to draw on United States ethane as a feedstock. While the project is estimated to cost $500 million, the move could reduce the producer’s feedstock costs by over 30%.

Written by: Derek Yong