SCG Chemicals and PTT Global Chemical Explore Joint Venture Amid Supply Disruptions
SCG Chemicals (SCGC) and PTT Global Chemical (GC) are studying a joint venture to bolster Thailand's petrochemical supply chains and ensure long-term industry sustainability. This move comes amid global energy price surges and supply disruptions, particularly impacting naphtha, a key feedstock. SCGC has already suspended some plant operations and is exploring ethane as an alternative and diversifying raw material sources. The partnership aims to enhance competitiveness and could significantly increase polypropylene and polyethylene production capacity to 6 million tonnes.
SCG Chemicals (SCGC), a subsidiary of Thailand's industrial giant SCG, has entered into a memorandum of understanding with PTT Global Chemical (GC) to explore a joint venture for developing olefins and polyolefins businesses. This strategic move aims to fortify Thailand's petrochemical supply chains and ensure the long-term sustainability and competitiveness of the industry. The decision is heavily influenced by current global geopolitical events, specifically the Israel-US war on Iran, which has led to significant disruptions in crude oil-derived naphtha supplies—a vital feedstock for petrochemicals—and a surge in energy prices.TheThe ongoing conflicts have already impacted SCGC, forcing the company to suspend operations at its Rayong olefins plant and the Long Son petrochemicals complex in Vietnam. In response, SCGC is proactively accelerating maintenance and progressing its ethane feedstock enhancement project at Long Son, which is anticipated to be operational by 2027. Ethane is being strategically pursued as an alternative to naphtha to mitigate supply risks. Furthermore, SCGC is diversifying its raw material sourcing beyond the Middle East, exploring new import channels from India, Australia, and Nigeria, given that 70-80% of its current naphtha imports originate from the Middle East. If the partnership with GC materializes, it could boost polypropylene and polyethylene production capacity to 6 million tonnes, strengthening national security in petrochemical supply and global competitiveness. The feasibility study is slated for completion in the third quarter of this year, with plans to establish a new entity within a year.
