Overview of the Partnership

MOL Energia and SCG Chemicals have formed a strategic partnership to facilitate the import of ethane for SCG Chemicals’ Long Son Petrochemicals (LSP) plant. This partnership involves MOL Energia signing a long-term charter contract for three new Very Large Ethane Carriers (VLECs) with SCG Chemicals. The VLEC project is crucial for SCGC’s LSP plant, which is one of the largest petrochemical plants in the region. The decision to import ethane is part of a strategy to enhance competitiveness by reducing feedstock costs and increasing operational flexibility. This strategic move is expected to bring significant cost savings and operational benefits to SCGC, further solidifying its position in the petrochemical industry [MOL].

SCG Chemicals and Long Son Petrochemicals

SCG Chemicals, a subsidiary of Siam Cement Group (SCG), is a leading player in the petrochemical industry, known for its strategic importance in Thailand and the broader Southeast Asian region. The company’s extensive portfolio includes the production of ethylene, propylene, and other petrochemical derivatives, which are crucial for various industrial applications. Long Son Petrochemicals (LSP), one of the largest petrochemical plants in the region, is a flagship project of SCG Chemicals. Located in Long Son, Vietnam, LSP is designed to produce a wide range of petrochemical products, including ethylene, propylene, and other derivatives. The plant’s significance lies in its capacity to meet the growing demand for petrochemicals in the Vietnamese market and beyond. Ethane, a key feedstock for LSP, plays a pivotal role in the plant’s operations. The use of ethane offers several benefits, including lower feedstock costs and increased operational flexibility. These advantages are particularly important in a competitive market where cost efficiency and adaptability are critical. The strategic decision to utilize ethane as a feedstock is part of SCG Chemicals’ broader initiative to enhance competitiveness and sustainability in the petrochemical industry [MOL].

MOL Energia and Very Large Ethane Carriers

MOL Energia, a subsidiary of Mitsui O.S.K. Lines, is a leading player in the shipping and logistics industry, with a strong focus on the transportation of liquefied natural gas (LNG) and other energy commodities. The company’s expertise in shipping and logistics has been instrumental in its role as a key partner for SCG Chemicals in the ethane transportation project. MOL Energia’s extensive experience in ethane transport and robust safety management practices have been crucial in securing a long-term charter contract for three new Very Large Ethane Carriers (VLECs). These VLECs are designed to meet the specific needs of SCG Chemicals, with a capacity of 100,000 m³ each, making them some of the largest vessels of their kind. The vessels feature advanced dual-fuel ethane propulsion engines, which offer several environmental benefits compared to conventional heavy fuel oil vessels. These engines reduce greenhouse gas emissions by up to 25% and lower nitrogen oxide emissions by 80%, contributing to a more sustainable and efficient transportation solution. The dual-fuel capability allows the vessels to operate on either ethane or heavy fuel oil, providing flexibility in fuel options and reducing operational costs. The new VLECs are equipped with state-of-the-art safety features and advanced navigation systems, ensuring the safe and efficient transportation of ethane from the United States to Vietnam, supporting SCG Chemicals’ strategic initiatives to reduce feedstock costs and enhance operational flexibility [MOL: New dual-fuel VLECs to transport ethane from US].

Logistics and Transportation

The route for transporting ethane from the United States to Vietnam involves a strategic journey across the Pacific Ocean, facilitated by MOL Energia’s extensive logistics services. MOL Energia has been providing these services for over 15 years, ensuring reliable and efficient transportation of ethane to SCG Chemicals’ Long Son Petrochemicals (LSP) plant in Vietnam. The long-term charter contract signed by MOL Energia with SCG Chemicals is a testament to the partnership’s commitment to operational efficiency and regulatory compliance. This contract not only ensures the continuous supply of ethane but also enhances the LSP plant’s competitiveness in the long term [MOL].

Environmental Impact

The environmental impact of the partnership between MOL Energia and SCG Chemicals is significant. Dual-fuel Very Large Ethane Carriers (VLECs) used for transporting ethane from the United States to Vietnam emit significantly lower levels of greenhouse gases, sulfur oxides, and nitrogen oxides compared to conventional heavy fuel oil vessels. This reduction is due to the efficient combustion of ethane, which has a lower carbon footprint and emits fewer pollutants [MOL]. The long-term environmental benefits of using ethane as a feedstock include reduced emissions and enhanced sustainability. SCG Chemicals’ commitment to sustainability and reducing emissions is evident in its strategic initiatives, which aim to minimize environmental impact and promote a greener future. This partnership not only supports SCGC’s strategic goals but also contributes to the global effort to combat climate change and reduce air pollution.