$4.5bn petro plan beats impasse
A Ba Ria-Vung Tau Department of Planning and Investment source said the two sides had agreed to calculate the land rental for 400 hectare site of this petrochemical complex. Thailand’s SCG and its partners including Qatar Petroleum International and PetroVietnam have reached an agreement with local authorities to ease the land rental bottleneck of the Long Son complex project.
"There is no exact rental fee at this time, but this is an important move to push the long-delayed project ahead. The agreement allows investors and local authorities to implement other works such as site clearance and then construction,” he said.
According to the agreement, the source said, the two sides would calculate land rental rates based on the land price issued in 2012 by the provincial people’s committee. This rent excludes costs for infrastructure development. Furthermore, the investors will enjoy land rental exemption during the first 15 years, comprising four years of construction and 11 years of operation.
The Ba Ria-Vung Tau Provincial Department of Finance will soon have to calculate the exact land rental fee for this project. Meanwhile, the provincial people’s committee must prepare a land compensation and site clearance plan conducted after the investors pay the land rental in advance.
SCG, which now holds 46 per cent share of Long Son project, was not available to give comments.
The Long Son petrochemical complex, located on Long Son island, was to have started in 2008 by SCG, PetroVietnam, Vinachem and Qatar Petroleum International. However, in July this year, state-run Vinachem announced to pull out of the giant petrochemical project.
According to a SCG announcement early this year, the complex’s capacity will consist of 1.4 million tonnes olefins from a flexible cracker utilising feedstock as ethane, propane and naphtha, with supporting infrastructure, such as storage facilities, port, jetty, power plant and other utilities.
Furthermore, the cracker will be fully integrated with a wide range of downstream products, including polyethylene, polypropylene and vinyl chloride monomer. The majority of these products will be consumed domestically.
However, Long Son’s construction has been delayed as the investors and the local authorities failed to reach an agreement on the land rental.
The local authorities planned to define the land rental rate at $20 per square metre for the project’s lifespan. However, the investors complained it was higher than $10 per square metre applied for surrounding projects.
Meanwhile, Ba Ria-Vung Tau Provincial People’s Committee claimed that with the total fund gained from the rate of $10 per square metre, they could not afford to develop infrastructure such as roads, electricity and water supplies to the project site.
