SouthAfrica.info (Johannesburg)

South Africa: Sasol Set to Go Big in Louisiana, U.S.

South African energy and chemicals company Sasol is set begin the front-end engineering and design phase for a gas-to-liquids plant it is planning to build in Lake Charles, southwest Louisiana in the United States, the company announced on Monday.

The project will provide the opportunity to beneficiate the gas reserves in the USA by leveraging Sasol's gas-to-liquids (GTL) experience and technology, according to Sasol's chief executive officer, David Constable.

"Through our innovative energy and chemicals technologies, we will provide the United States with world-class, cleaner-burning fuel, contribute to the country's energy security, boost downstream manufacturing capacity and diversify the utilisation of domestic gas resources," he said.

The gas-to-liquids facility will be the first of its kind in the USA and will produce four-million tons annually or 96 000 barrels per day (bbl/d) of high-quality transportation fuel, including GTL diesel and other chemical products.

'Largest single manufacturing investment'

"This project will be the largest single manufacturing investment in the history of Louisiana and it also represents one of the largest foreign direct investment manufacturing projects," said Louisiana Governor Bobby Jindal.

Project costs for the facility are estimated to be between US$11-billion and $14-billion.

"The GTL project will be delivered in two phases, with each phase comprising 48 000 bbl/d," Sasol said.

"The first phase is planned to come into operation in the 2018 calendar year and the second phase the following calendar year."

World-scale ethane cracker

Also part of the project are plans to build a world-scale ethane cracker, which will allow Sasol to expand its ethylene derivatives business in the United States. "The cracker will also benefit from the current low US natural gas prices and the abundance of ethane," Sasol said.

Project costs are estimated to be between $5-billion and $7-billion.

Both the GTL facility and ethane cracker are expected to create at least 1 200 permanent jobs and 7 000 construction jobs at peak.

"Sasol envisions a game-changing partnership with the State that could yield significant benefits not only for our company but for the company and the community," Constable said.

Sasol also announced its plans to adopt a phased approach to the next stage of its GTL facility planned for western Canada. The feasibility study was completed in 2012 and the regulatory application and land procurement processes are under way.

"However in accordance with the need to prioritise Sasol's growth portfolio, this investment opportunity will be phased after the integrate Lake Charles GTL and cracker projects," Sasol said.

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