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Sasol Secures Permits for Louisiana GTL Plant, Ethane Cracker

Sasol Ltd. said it plans to make a decision in the next two years on whether to construct a gas-to-liquids (GTL) plant in Louisiana, after the U.S. Army Corps of Engineers (USACE) awarded the South African company a wetlands permit to build the plant and an ethane cracker.

On Tuesday, the USACE's New Orleans District approved the permit for Sasol to build the facilities near the town of Westlake in Calcasieu Parish. Issuance of the permit kicked off a 20-day public comment period.

Sasol announced plans to build the GTL plant, with an ultimate price tag between $16 billion and $21 billion, in late 2012 (see Daily GPI, Dec. 4, 2012). The plant would produce up to 96,000 b/d, making it the second-largest of its kind in the world, after Royal Dutch Shell plc's Pearl facility in Qatar (see Daily GPI, March 25, 2011).

"This is an important milestone in moving our U.S. mega projects forward," Sasol spokesman Russell Johnson told NGI on Wednesday. "We expect to make a final investment decision on the ethane cracker and derivatives complex this year with a decision for GTL following within 24 months."

U.S. Sen. David Vitter (R-LA) said he was "extremely pleased" the USACE had awarded the permit and construction could move forward.

"It's a huge investment and will help provide a great boom for southwest Louisiana," Vitter said last Friday. "Louisiana has obviously shown a commitment to the energy and chemical industries, and our abundant natural gas resources make us a perfect fit for the new facility."

If constructed, Sasol's facilities would be near the Barnett, Eagle Ford and Haynesville shale plays and include a gas processing plant, a chemical plant and a refinery to convert natural gas into diesel, jet fuel and other chemical products.

According to the permit, Sasol's plans call for developing 3,034 acres adjacent to its existing facility at Westlake. About 743 acres of wetlands would be impacted, with more than 3.8 million cubic yards of fill material used to support the facilities, roadways, drainage features and parking.

Two other GTL projects in Louisiana were announced last year. In January 2013, Houston-based G2X Energy Inc. announced plans to build a $1.3 billion facility on 200 acres at the Port of Lake Charles (see Daily GPI, Jan. 18, 2013). The facility would use natural gas to produce methanol, which would then be converted to gasoline.

In September 2013, Portugal's SGC Energia SA and Houston-based Great Northern Project Development LP formed Juniper GTL LLC to convert a dormant steam methane reformer at Westlake into a GTL facility (see Daily GPI, Sept. 6, 2013). The $100 million project would create a facility that produces clean waxes, drilling fluids, diesel and naphtha.

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