By THE NATION
The equity transaction, valued at US$36.1 million, will increase SCG’s direct and indirect stake in LSP to 71 per cent, from 46 per cent, while the Vietnamese parties will hold 29 per cent, VSCG said.
The company said LSP’s petrochemicals complex benefits from integration, economies of scale, and competitive feedstock flexibility. Non-petrochemical supporting infrastructure such as a deep-sea port and other facilities are also included at about 30 per cent of the total investment cost. At the heart of the project is a 1 million tonne ethylene cracker with flexible gas and naphtha feed to yield total olefins capacity of up to 1.6 million tonnes a year, depending on the feedstock mix.
The olefins cracker is equipped with high flexibility to use gas up to 80 per cent of total feedstock, for cost optimisation, and will be fully integrated to the downstream polyolefins capacities of similar scale.
The project will be financed with a combination of equity and debt. The final investment decision is expected in the first half of 2017 and the capital expenditure outlay will be finalised afterwards.
With a five-year construction period, the start-up is expected in 2021.
The LSP complex is 100 km from Ho Chi Minh City, the main market and economic heartland of Vietnam. In 2015, Vietnam imported more than 2 million tonnes of polyolefins, with future high single-digit growth rates anticipated.
This transaction is exempt from the rule of information disclosure concerning the acquisition and disposition of assets of listed companies and is not a connected transaction,
VSCG said the deal demonstrated SCG’s interest in regional investments with an emphasis on creating value for all stakeholders.