Sasol’s ethane cracker at its troubled Lake Charles project in the US is now online, the synfuels and chemicals group announced on Wednesday. A cracker takes ethane and processes it into ethylene, which is used to make a number of speciality chemicals.
In a statement, Sasol said the cracker, which is the heart of the mega-project, reached beneficial operation on Tuesday and will provide feedstock to six new derivative units.
“The cracker is the cornerstone of Sasol’s transformation into a global chemicals company,” said Sasol joint president and CEO Stephen Cornell. “It solidifies our presence in the US and will anchor our operations there for decades to come.”
The project has, however, come at great cost to Sasol and its shareholders. The initial budget of $8.9bn has ballooned to $12.9bn and the company share has more than halved in the past year. This week, Sasol lowered its earnings forecast from Lake Charles for this financial year to between $150m and $300m (compared with a previous forecast of $300m to $350m) due to technical issues and schedule pressures.
The cracker is one of the largest in the world with a nameplate capacity of 1.54-million tonnes per year. “Approximately 90% of the cracker’s ethylene output will be further processed into commodity and high-margin speciality chemicals for markets in which Sasol has a strong position,” the company said.
Sasol’s customers use these speciality chemicals to make a range of products, including detergents, fragrances, lubrication fluids, abrasives, paints, film, and food packaging.
Three of the cracker’s seven units are online and comprise more than 60% of the project’s total output.
Said Bongani Nqwababa, Sasol joint president and CEO, “Our construction and commissioning teams are working flat out to deliver the rest of the units between November 2019 and by the first quarter of 2020.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.