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by Adam Bruns

Following up on two separate projects whose feasibility studies were announced just over a year earlier, South Africa-based energy and chemicals company Sasol announced in early December it will combine them into one complex. The firm has begun front-end engineering and design for an integrated, 96,000-bbl/day gas-to-liquids (GTL) facility and a world-scale ethane cracker with downstream derivatives that will be sited at Sasol’s Lake Charles site in southwest Louisiana.

Though its statement cautioned that a final investment decision would still need to be made at a later juncture, the firm plans to invest between $16 billion and $21 billion (up to $14 billion on the GTL facility alone) and create 1,253 direct jobs paying an average salary, at full employment, of nearly $88,000, plus benefits, and resulting in an additional 5,886 new indirect jobs, for a total of more than 7,000 direct and indirect jobs. Sasol also will retain 435 existing direct jobs in Westlake as a result of the project.

Sasol CEO David Constable, said there is significant opportunity to “beneficiate” the abundant gas reserves in the United States by leveraging Sasol’s GTL experience and technology. Sasol’s commercially proven GTL process diversifies the use of natural gas through the production of premium quality liquid fuels and chemicals.

“Sasol is proud to be driving forward with the next phase of the strategic mega-projects that we have announced today,” he said, citing the support of the State of Louisiana, Gov. Bobby Jindal and Calcasieu Parish. “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 utilization of domestic gas resources.”

Sasol expects beneficial operation of the cracker to be achieved during the 2017 calendar year. The first phase of the GTL complex is planned to come into operation in the 2018 calendar year and the second phase the following calendar year. Among the GTL complex’s proposed products are GTL diesel, GTL naphtha, liquefied petroleum gas (LPG); GTL base oils; paraffin; linear alkyl benzene (LAB); and medium and hard wax. As for the cracker, core Sasol ethylene derivatives include ethylene oxide, MEG, Ziegler alcohol, Guerbet alcohol, ethoxylates, a variety of polyethylene products and co-monomers.

“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 in the history of the entire United States,” said Jindal. “Sasol is one of many energy companies that is expanding in Louisiana because of our world class energy infrastructure, strong business climate, and incomparable work force.”

Global GTL Strategy

Indeed, autumn also brought major oil & gas-related project announcements from Benteler Steel/Tube in October (675 jobs and $900 million at the Port of Caddo-Bossier in northwest Louisiana) and, one week after the Sasol announcement, from UPS Midstream Services, which is adding 95 new jobs with a $3.9-million investment in Jena, in central Louisiana. Those jobs will pay an average salary of more than $73,000, plus benefits.

Louisiana offered Sasol a custom incentive package that includes a performance-based grant of $115 million for land acquisition and infrastructure costs associated with the facility. Sasol also will receive the services of work-force training program LED FastStart, and will qualify for Louisiana’s new Competitive Projects Payroll Incentive (up to 15-percent payroll rebate for each GTL job) and Quality Jobs Program (up to 6-percent payroll rebate for each ethane cracker job). The state will invest $20 million for a new training facility and associated equipment focused on industrial technology at SOWELA Technical Community College in Lake Charles. And both facilities will qualify for the state’s industrial tax exemption program.

The Port of Lake Charles helped to locate the 650-acre (263-hectare) site within the 203-sq.-m. (525-sq.-km.) Lake Charles Harbor & Terminal District. Port officials also provided key assistance in helping Sasol secure options to buy the property that will make the project possible.

On the same day, Sasol also announced it will adopt a phased approach to the next stage of its planned Montney GTL facility in northeastern British Columbia, Canada, with the investment to be phased after the integrated Lake Charles GTL and cracker projects.

A decision to proceed with FEED will be considered at a later stage. Sasol’s portfolio includes existing GTL JV facilities in Qatar and Uzbekistan, with a Nigeria project expected to be complete in 2013.