Vietnam's Long Son Petrochemical to build ethane storage facility to diversify feedstock sources

Long Son Petrochemical, a wholly owned subsidiary of Thailand’s SCG Chemicals, has announced plans to invest $700 million in constructing an ethane storage facility at its plant in southern Vietnam. This move is designed to reduce the company's reliance on naphtha, a more expensive feedstock that has sharply impacted profitability in 2024.

Currently, Long Son Petrochemical operates a 950,000 tons/year mixed-feed cracker, which utilizes a 70:30 mix of naphtha and LNG. However, with naphtha prices soaring, the company has faced considerable financial pressure. This cost burden prompted the company’s decision to temporarily shut down operations in late October, with a projected five-to-six-month downtime.

Sakchai Patiparnpreechavud, CEO of SCG Chemicals, explained that the shutdown was due to the deteriorating market conditions. He noted, "The price spread between naphtha and HDPE has narrowed to just $300/ton, largely because of the global petrochemical slowdown. If this spread widens to $400/ton, we will consider resuming operations at Long Son."

The company has yet to clarify its plans for sourcing ethane or whether it will invest in ethane processing units. Currently, the United States is the world’s largest ethane supplier, and sourcing from this region would necessitate significant logistical preparedness at the plant.

Written by: Rochelle Nguyen