Sasol's projects on track to deliver – Cox

8th March 2005 By: Martin Czernowalow

South African petrochemicals giant Sasol, which yesterday reported a 65% leap in operating profit during the second half of last year, said that several of its projects were on schedule and reaching completion, and would add to the group's bottom line in the short-term to medium-term.

Reporting the group's interim results, in Johannesburg, Sasol chief executive Pieter Cox outlined the main projects that the company is currently involved in.

He pointed out that the Oryx I GTL project, a gas-to-liquids joint venture between Sasol and Qatar Petroleum, is 75% complete.

The project is scheduled for completion in December this year, with production expected to start in March next year.

It is expected that Oryx I will have an output of 34 000 barrels per day (bpd), with a planned 65 000 bpd boost in output within two years that would bring total output to 99 000 bpd.

In terms of liquid fuels, Cox said Sasol is currently awaiting a Competition Commission decision, which should be delivered by mid-year, in regards to the establishment of South Africa's biggest liquid fuels company, Uhambo Oil.

Sasol last year concluded a deal with Malaysia's State oil company, Petronas, to merge its downstream fuel operations with Petronas's South African subsidiary, Engen.

Under the joint venture, Sasol and Petronas will each have a 37,5% stake in the new company, and black-empowerment groups Worldwide African Investments Holdings and Tshwarisano LFB Investment will have a combined 25% interest.

Cox again stressed that Sasol is very upbeat about a coal-to-liquids prefeasibility study that has been initiated in China.

The group is looking into the economic viability of constructing two $3-billion to $4-billion coal-to-liquid plants in the Asian country, after signing a memorandum of understanding with the Combined Chinese Working Team (CCWT), as well as the Shenhua Coal Liquefaction Corporation and the Ningxia Coal Group Company.

The CCWT represents two provinces in China with significant coal reserves as the locations for the proposed CTL plants.

In Iran, Sasol is participating in a $900-million polymer joint venture, which is expected to begin contributing to the group's bottom line next year.

Cox noted that the project, known as the Arya Sasol Polymer Company, a 50:50 joint venture with Iranian State-owned petrochemicals group Pars Petrochemicals Company, is currently 85% complete, and will be commissioned in the fourth quarter of this year.

The project, which will produce ethylene as well as high- and low-density polyethylene, is scheduled to come on stream in phases during late 2005 and early 2006 and will increase the group's polymer production by 300 000 t/y.

Meanwhile, locally situated Project Turbo is also progressing well and will be commissioned in January next year.

The R12-billion project consists of a number of developments that will be undertaken in phases, with the first part entailing the upgrading of an existing polyethylene plant in Sasolburg and the second phase the completion of the key new world-class 300 000 t/y polypropylene plant in Secunda.

The focus of these developments will be on preparing synfuels for the new fuel specifications, which will come into force in January 2006, requiring South African refineries to supply 100% unleaded petrol.

Last week, the group announced that it has appointed Patrick Davies to replace Cox as CEO from July 1.

Davies yesterday commented that he was honoured and delighted to take on the new position.

“With the technology available to us, and the strong management team, I am sure that Sasol will continue going from strength to strength,” he said.