Mathabo Le Roux
20 November 2008
Johannesburg — SASOL's plans to build a new coal-to-liquids plant in Limpopo, with a production capacity of 80000 barrels per day, are continuing.
CE Pat Davies yesterday said the project, named Mafutha, would remain viable even in a low oil price environment.
Moreover, the Industrial Development Corporation has indicated that it would come on board with equity, bringing public money to the project. The project is, however, still in a prefeasibility stage.
Speaking at the release of Sasol's sustainability report yesterday, Davies said the demand for reliable transport energy would continue to grow, despite the financial crisis.
Citing International Energy Agency figures, Davies said projections are for transport energy demand to climb from the current 85-million barrels per day to 105-million barrels per day by 2030.
At an estimated cost of $5bn- $7bn (upwards of R70,5bn at current exchange rates) the Mafutha project would be SA's largest greenfields investment to date.
"It will supply 80000 barrels per day of liquid fuel and, at the plant alone, jobs will be provided for 8000 people," Benny Mokaba, Sasol's South African energy cluster head, said.
The mine complex at Mafutha would employ a further 4000 people. " In many respects, Mafutha will be better than Sasolburg and Secunda." Mafutha would, however, come at considerable environmental cost as Sasol's process for converting coal to liquid fuel is three times as carbon-intensive as conventional refining.
The trend is to build coal-to-liquids plants near oil wells for possible reinjection of carbon dioxide into oil wells.
The company admitted it was faced by a formidable challenge to develop technology to curb its carbon emissions.
Sasol is the second-biggest emitter of carbon in SA after Eskom, and counts among the top emitters in the world.
Mokaba said the group was ex ploring a range of carbon capture and storage methods to sequestrate its emissions. One of the options was to plant thousands of hectares of spekboom, a plant with a high ability to absorb carbon.
However, he acknowledged that the environmental challenge was a complex one that needed a multifaceted solution.
According to Sasol's sustainability report, the group's total greenhouse gas emissions have risen to 72,70-million tons at its financial year-end, from 69,8-million tons last year. However, the group's olefin and surfactants emissions were not included in last year's figures.
The group's carbon intensity has declined to three tons per ton of production, compared with 3,29 tons last year.
Environmental commentators were, however, scathing of Sasol's lack of progress to better its impact on the environment.
Richard Worthington, manager of the Worldwide Fund for Nature climate change programme, said in response to Sasol's report that its business model and position on greenhouse gases were "essentially defensive of a core business that is treated as not up for discussion, despite it being incompatible with a climate-safe future".
"While the international community grapples with the challenges of retiring technology that is unsustainable or incompatible with low-carbon development, Sasol apparently ignores this debate and is evading the option of realigning ..." he said.
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