Sasol gives update on Lake Charles projects

Sasol Ltd. cited its ethane cracker and gas-to-liquids complex in Lake Charles, estimated to cost $16 billion to $21 billion, as a highlight of its July to March financial results, the first nine months of the firm’s fiscal year.

The South African energy giant is in the engineering and design phase of the ethane cracker, which breaks natural gas into smaller molecules to make ethylene — used in making plastic, Chief Financial Officer Christine Ramon said in a Friday letter to investors. The cracker will cost an estimated $5 billion to $7 billion and produce 1.5 million tons of ethylene, with production expected to begin in 2017.

The ethylene will be used to make:

• Ethoxylates used in surfactants, which increase the contact between a liquid and another substance. Surfactants are used to make products such as soaps and inks.

• A range of alcohols, used in surfactants and a wide range of specialty applications.

• Octene, used in polyethylene.

• Polyethylene, for film and other markets.

Ramon also said Sasol expects to begin during the second half of 2013 the engineering and design work on the gas-to-liquids facility, which will convert natural gas into diesel.

Sasol will produce at least 96,000 barrels per day of product, with the potential to produce up to 10 percent more, she said. The gas-to-liquids project will be completed in two phases, with each phase capable of producing at least 48,000 barrels.

About 70 percent of that production will be low-sulphur diesel, with naphtha and liquid petroleum gas as co-products, Ramon said. Thirty percent of the production will be chemical products, including paraffin feedstock for linear alkyl benzene, a surfactant; wax products; and synthetic base oils.

Sasol expects to make a final decision on the gas-to-liquids project within 18 to 24 months after the decision on the ethane cracker, she said.

The project is expected to create 1,250 new jobs.

Meanwhile, Ramon said construction on Sasol’s 100,000-ton-a-year ethylene tetramerization unit in Lake Charles remains on schedule. The facility, the first of its kind, is expected to start operations during the third quarter of this year, she said.

The unit will produce 1-octene and 1-hexene, used to make products that give plastic elasticity and strength, according to Sasol.