Qatar Petroleum signs deal to invest in Vietnam's Long Son petrochemical project

News - Qatar Petroleum International has signed an agreement to invest in Vietnam's $4 billion Long Son petrochemical project, with Petrovietnam, Vietnam National Chemical Corp or Vinachem, Thailand's SCG Chemicals and Thai Plastics and Chemicals Co, the Middle East company said late Monday.

The agreement is expected to be finalized by end February, a source from Petrovietnam said Tuesday.

The Long Son project, Vietnam's first fully integrated petrochemical project is expected to have a production capacity of 3 million mt/year when it comes onstream in 2014. The project was deferred indefinitely in early 2009 due to financing woes.

Though the release does not state how much Qatar Petroleum will invest, a source close to PetroVietnam said Tuesday that the Middle East company is expected to contribute around 25% of the total cost, which works out to around $1 billion.

The complex will house a 1.4 million mt/year olefins cracker that can switch between gases such as ethane and LPG to naphtha for feedstock, Platts has reported previously.

QPI will supply feedstock for the complex which will be located on Long Son Island in southern Vietnam in the province of Ba Ria-Vung Tau. The facility will be close to a refinery that Vietnam plans to build at Long Son -- its third after the Dung Quat refinery, Platts reported previously.

The cracker will be integrated with downstream units, which include a 400,000 mt/year HDPE plant, 450,000 mt/year polypropylene plant and 400,000 mt/year LLDPE plant. There will also be PVC-related production capacity covering Chlor-Alkali, ethylene dichloride, and vinyl chloride monomer.

Preparations for issuing a engineering, procurement and construction contract are currently underway, said QPI. The complex was initially expected to be built over 2011-2015.

The project is managed by Long Son Petrochemical Ltd company, established in 2008, in which PetroVietnam holds 18% stake, Vinachem (11%), Thailand's SCG (53%) and Thai Plastics and Chemicals (18%).