Name and Location
Lake Charles chemicals complex, Louisiana, US.

Client
Sasol.

Project Description
Sasol is preparing a multiproject investment in North America, which will result in the development of an integrated two-phase 96 000 bl/d gas-to-liquids (GTL) Secunda-type complex at Lake Charles, in the southern US state of Louisiana, and an integrated 1.5-million-ton-a-year ethane cracker plant.

The plan involves deploying Sasol technology, including the group’s proprietary GTL offering. A major difference, compared with the Secunda complex, however, is that the Lake Charles complex will not be backward integrated, as Sasol plans to buy gas from the numerous producers in the region.

Sasol also has its own gas resources, in Canada, which will give it a cover ration to provide up to 70% of the total gas consumption of Louisiana.

Value
The current project cost for the GTL facility has risen to between $11-billion and $14-billion, owing to a change in the fuel/chemicals configuration and higher cost escalations, which, in turn, was caused by the phasing of the project after the ethane cracker had been installed.

The cost of the ethane cracker has also increased to between $5-billion and $7-billion, owing to an increase in plant capacity and the inclusion of additional downstream derivative units.

Duration
Beneficial operation of the ethane cracker plant is expected to be achieved in 2017, followed by the two phases of the GTL complex in 2018 and 2019.

Latest Developments
Sasol has secured investment incentives, collectively valued at an estimated $1-billion, from the state of Louisiana, in the US, to support its proposed development of the Lake Charles chemicals complex.

The JSE-listed group is considering investments valued at between $16-billion and $21-billion in Louisiana, which could be pursued from 2014 to 2020.

It expects to make a final investment decision on a 1.5-million-ton-a-year ethane cracker, which could involve an investment of between $5-billion and $7-billion during 2014, and for the project to be operational by the end of 2017.

It is also likely to move into the front-end engineering and design (Feed) phase for a 96 000 bl/d GTL facility later this year. The GTL project, which will be developed in two phases, could involve an investment of between $11-billion to $14-billion.

Both projects are premised on the availability of low-priced gas, which has become available in the US, owing primarily to the large-scale adoption of hydraulic fracturing to exploit shale gas reserves.

The incentives have been negotiated with Louisiana Economic Development, the agency responsible for facilitating investment in the state.

The incentives offer payroll and industrial land tax relief. In addition, the state is collaborating with Sasol to support the construction of a training centre and is working with the company to facilitate the permitting process, without altering any of the requirements.

The incentives are conditional on Sasol meeting specific employment thresholds and investment schedules.

Sasol has also confirmed that, following a review of its project portfolio, the US projects should proceed to the Feed stage, and will be prioritised ahead of its initial plans for a GTL plant in Canada.

Key Contracts and Suppliers
Fluor Corporation (Feed).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Sasol, tel +27 11 441 3111 or +27 11 788 5092.
Fluor Corporation media relations, Keith Stephens, tel +1 469 398 7624.