Name of the Project
Lake Charles Chemicals Project (LCCP).

Location
Louisiana, US.

Project Owner/s
Sasol.

Project Description
The project proposes the development of a world-scale 1.5-million-ton-a-year ethane cracker and derivatives complex near Lake Charles, in the southern US state of Louisiana.

Besides the ethane cracker, the project includes six downstream chemical projects. Two large polymer plants – low-density and linear low-density polyethylene (LLDPE), and an ethylene oxide/ethylene glycol plant (EO/EG) – will use about two-thirds of the ethylene produced, while three smaller, higher-value derivative plants will use the balance to produce speciality alcohols, ethoxylates and other products.

The LCCP will use about 100 000 bbl/d of ethane, sourced from suppliers that feed ethane into Mont Belvieu, Texas. While Sasol expects ethane prices to rise, it remains confident of feedstock availability, having contracted 70% of its supply and buying the balance opportunistically on the spot market.

Once commissioned, the petrochemicals complex will almost triple Sasol’s chemical production capacity in the US.

Potential Job Creation
Not stated.

Capital Expenditure
The cost of the LCCP has been revised from between $11.6-billion and $11.8-billion, announced in February 2019, to between $12.6-billion and $12.9-billion in May 2019.

Planned Start/End Date
The new EO/EG production facility at LCCP reached beneficial operation in June 2019.

Latest Developments
Sasol announced in early June that its subsidiary, Sasol Financing USA, had entered into new US dollar-denominated senior unsecured credit facilities comprising a $1.6-billion term loan facility and a $150-million revolving credit facility.

The facilities have a tenor of five years and will be used to refinance the outstanding LCCP asset finance loan.

Bank of America Merrill Lynch, Mizuho Bank and Sumitomo Mitsui Banking Corporation were mandated as global coordinators, bookrunners and mandated lead arrangers for the transaction, which was syndicated to a targeted group of relationship banks.

Along with the bookrunners, there are two other mandated lead arrangers – BNP Paribas and Industrial, and the Commercial Bank of China’s London branch.

Bank of China’s Johannesburg branch, China Construction Bank’s Johannesburg branch, Citibank, Intesa Sanpaolo’s New York branch, JP Morgan Securities and Mitsubishi UFJ Financial Group have joined as lead arrangers.

Rothschild & Co and Identity Advisory have acted as independent financial advisers to Sasol in respect of the transaction.

Engineering News reported in May that Sasol had announced another large increase in the capital cost of the LCCP and that it would accelerate its $2-billion noncore asset disposal programme and use the proceeds to deleverage its balance sheet.

Meanwhile, the new EO/EG production facility at its LCCP has reached beneficial operation.

The EO/EG unit is the second of seven LCCP production facilities to come on stream and has a capacity of 300 000 t/y of EO. The EO/EG plant will also supply EO as a feedstock for Sasol's existing 130 000 t/y ethoxylates unit, as well as the 100 000 t/y LCCP ethoxylates plant that is under construction.

Key Contracts and Suppliers
Fluor Corporation and Technip joint venture (engineering, procurement and construction management contract).

On Budget and on Time?
In 2014, the group said the Louisiana project would cost $8.9-billion to build, but there have been several cost revisions since then, the most recent being in February, when Sasol provided a cost-to-completion range of between $11.6-billion and $11.8-billion.

The latest revision increases the project’s price tag by between $1-billion and $1.3-billion, with the higher figure including a contingency of $300-million.

Contact Details for Project Information
Sasol director of public affairs (US) Russell Johnson, tel +1 281 588 3027 or email media@us.sasol.com.
Sasol (South Africa) head of group media relations Alex Anderson, tel +27 11 441 3295 or email alex.anderson@sasol.com.