27-10-2014

Sasol approves an $8.1B ethane cracker and derivatives complex in Lake Charles

Today, Sasol Limited announced the final approval of an US$8.1 billion ethane cracker and derivatives complex at its existing site in Lake Charles, Louisiana.

“Sasol’s decision to move forward with this project is a defining moment in our company’s history, and an important milestone in the execution of our growth strategy,” said David Constable, President and Chief Executive Officer, Sasol Limited. “Once commissioned, this world-scale petrochemicals complex will roughly triple our chemical production capacity in the United States, enabling Sasol to further strengthen its position in a growing global chemicals market. The U.S. Gulf Coast’s robust infrastructure for transporting and storing abundant, low-cost ethane was a key driver in our decision to invest in America.”

At the heart of the project is an ethane cracker that will produce 1.5 million tons of ethylene annually, benefitting from significant economies of scale. The complex also includes six chemical manufacturing plants. Approximately 90 percent of the cracker’s ethylene output will be converted into a diverse slate of commodity and high-margin specialty chemicals for markets in which Sasol has a strong position, underpinned by collaborative customer relationships.

“In spite of a largely volatile macroeconomic outlook, we are confident that we will deliver this project successfully, by drawing on our experience of executing world-scale fuel and chemical facilities, and enlisting the best employees and industry partners,” said Constable. “The Sasol team and our contractors have strong track records in project management, engineering, fabrication and construction of similar large-scale petrochemical complexes, with deep expertise along the U.S. Gulf Coast.”

Sasol has selected Fluor Technip Integrated, a joint venture of two world-class firms, as the primary engineering, procurement, and construction management contractor for this project. Sasol’s project management team is also supported by WorleyParsons, who bring with them significant mega-project experience.

An additional US$800 million will be invested in infrastructure and utility improvements, as well as land acquisition, to establish the Lake Charles location as an integrated, multi-asset site that will enable growth for decades to come.

Sasol is well-advanced in raising the funds required for construction and will utilise a variety of international U.S. dollar-based sources. Site preparation is underway, and the company expects that the facility will achieve beneficial operation in 2018.

“The economic benefits of this project will extend to all of our shareholders, 67 percent of whom are located in South Africa, and will also enable us to pursue further growth opportunities in Southern Africa,” said Constable. “In addition, this project will deliver significant benefits to the State of Louisiana and the United States. More specifically, it will enhance local investment and job creation in the surrounding communities, while strengthening downstream manufacturing and increasing exports.”