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Sasol Green Lights $8B Louisiana Ethane Cracker Complex

Sasol Ltd. on Monday pulled the trigger on an $8.1 billion ethane cracker and derivatives complex at its Lake Charles, LA, facility, an expansion that should triple the South African company's chemical production capacity in the United States.

In September Sasol received a wetlands construction permit to build the ethane cracker near Westlake in Calcasieu Parish from the U.S. Army Corps of Engineers (see Daily GPI, Sept. 5).

CEO David Constable called the decision to build the cracker "a defining moment in our company's history and an important milestone in the execution of our growth strategy."

Once commissioned, as expected in 2018, the world-scale petrochemicals complex would "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."

The cracker plant may precede construction by Sasol of a gas-to-liquids complex in Lake Charles that if built could be one of the largest in the world. Sasol expects to make a decision on the GTL plant within two years.

The ethane cracker is to produce 1.5 million tons/year. The complex also would include six chemical manufacturing plants. Around 90% of the ethylene output is to be converted into a slate of commodity and high-margin specialty chemicals.

"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."

An additional $800 million is to be invested in infrastructure and utility improvements, and land acquisition, to establish Lake Charles "as an integrated, multi-asset site that will enable growth for decades to come," Sasol officials said. Site preparation already is underway.

"The economic benefits of this project will extend to all of our shareholders, 67% 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."

Sasol has selected Fluor Technip Integrated as the primary engineering, procurement and construction management contractor. The project management team also is supported by WorleyParsons.

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