Sasol Board Approves $8 Billion Louisiana Cracker

28.10.2014 -

After receiving all permits, the board of South African chemical producer Sasol has given the green light to begin construction on the company's planned $8.1 billion, 1.5 million t/y ethane cracker and derivatives complex set to start up at Lake Charles, Louisiana in 2018.

Sasol president and CEO David Constable said the world-scale petrochemical complex on the US Gulf Coast will "roughly triple" the company's capacity in the United States. The region's "robust infrastructure for transporting and storing abundant, low-cost ethane was a key driver in our decision to invest in America," Constable said.

The complex will house six chemical manufacturing plants, and the company said about 90% 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."

In a conference call with journalists, Steven Cornell, executive vice president, international operations, said Sasol plans to produce altogether around 900,000 t/y of polyethylene, split evenly between LDPE and LLDPE, along with 300,000 tonnes/year of ethylene oxide and ethylene glycol. It also plans units to produce about 300,000 tonnes/year of specialty alcohols for detergents.

Fluor Technip Integrated, a joint venture of US contractor Fluor and the US offshoot of the French engineering firm Technip, has the contract for primary engineering, procurement and construction management.

Australian consulting firm WorleyParsons is working with the Sasol project management team.

Sasol said it will also spend $800 million on infrastructure improvements and land acquisition to make the Lake Charles location an "integrated, multi-asset site that will enable growth for decades to come."

Earlier, the company said it would build a first-phase 96,000 barrel/d gas-to-liquids plant at the same site, set to cost $11-$14 billion and go on stream in 2019. A decision on the second phase has not been announced.

Altogether, the project, said to be one of the largest foreign direct investments in US history, is receiving incentive payments from the state of Louisiana, amounting to $257 million.

The state also offers industrial investors a ten-year exemption from property taxes.