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February 11, 2015

Volume 17 Issue 52

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Sasol Delays Louisiana GTL Decision

Sasol will delay the final investment decision on a 96,000 barrels per day gas-to-liquids plant in Louisiana as part of a plan to conserve cash in response to lower international crude oil prices.

The company first announced plans in late 2012 for the Lake Charles, La., GTL plant, which would make diesel and other refined products, including base oil for lubricants.

“The timing of the decision will take into consideration progress made with the execution of the company’s world-scale ethane cracker and derivatives complex, prevailing market conditions and other strategic investment opportunities,” the company stated in a Jan. 28 news release.

“Albeit at a much slower pace, we will continue to progress the U.S. GTL facility. This will allow us to evaluate the possibility of phasing in the project in the most pragmatic and effective manner. North America and our home base in Southern Africa remain strategic investment destinations for Sasol,” David Constable, president and CEO, said in the news release.

In a November 2013 presentation at an American Fuel & Petrochemical Manufacturers conference in Houston, Sasol estimated its capital investment for the GTL project at $11 billion to $14 billion, and expected to make a final investment decision in 2016. At that time, the Lake Charles project startup was expected in two phases: a first phase in 2019, and a second phase – including base oil – in 2020.

“We have not provided a revised capital cost as the project remains under front-end engineering and design,” Sasol spokesman Alex Anderson told Lube Report yesterday.

Among GTL refineries/base oil plants, the Port Charles plant would be second in size only to Shell and Qatar Petroleum’s Pearl GTL project, which can produce 140,000 b/d of GTL products. Pearl’s total base oil capacity is 28,000 b/d. The overall Pearl refinery cost about $19 billion and opened in 2011.

Sasol said it is proceeding with construction of an ethane cracker and derivatives complex in Louisiana. The ethane cracker will produce 1.5 million tons per year of ethylene, one of the chemical industry’s key buildings blocks for alcohol- and plastics-based products, including solvents, surfactants and polymers. The company considers it the first step in developing the site near Lake Charles into an integrated multi-asset, multi-business hub, which will enable future growth for several decades to come.

South Africa-based Sasol is an integrated energy and chemicals company with more than 33,000 people working in 37 countries. Its Sasol North America Inc. subsidiary is based in Houston.