Petrochemical group Sasol has ditched plans to use liquid natural gas (LNG) to reduce reliance on coal at its Secunda facility — the world’s largest greenhouse gas emitter — saying the option has become too expensive.
“The liquid fuels component of the Secunda refinery remains fully impaired. At December 31 2024, the recoverable amount of the refinery improved as a result of the optimisation of the SA Emission Reduction Roadmap (ERR), leveraging an extended range of levers to maximise production for as long as possible, reducing capital, feedstock and electricity cost,” the company said on Monday in releasing its interim results.
“Aligned to our broader transition plan, LNG as an alternative gas feedstock is no longer considered feasible at current and forecast prices, focus remains on maintaining continuous supply of quality and cost-effective coal,” it said. Secunda’s feedstock was constrained
Sasol’s 2021 decarbonisation road map said it believed the LNG market was an attractive option for reducing its coal use. The 2021 road map pledged to reduce its emissions 30% by the end of the decade by substituting coal with more gas.
The Secunda facility has the capacity to convert about 40-million tonnes of coal a year into 150,000 barrels of crude oil a day of liquid synthetic fuels.
Built in the 1970s near large coalfields, Secunda’s coal-to-liquid processes limit the plant’s ability to reduce greenhouse gas emissions. The company said previously that unless it changes the feedstock or finds solutions to capture and use concentrated carbon dioxide, its emissions — second only to Eskom’s — will remain high.
The Secunda plant accounts for more than 80% of Sasol’s scope 1 and 2 carbon emissions
Sasol group CEO Simon Baloyi said that when the Ukraine-Russia war broke out in 2022 — a year after the group outlined its decarbonisation road map — LNG prices shot through the roof, forcing the company to relook its plans.
“The prices meant we cannot bring LNG as a feedstock into the facility. LNG was a big part of our offsetting programme at the time. We said we needed a lot of LNG to reduce our emissions by 30%,” said Baloyi.
“What our decision means is twofold: first, post 2034 our gas will start to decline in Mozambique, and second, we will need to respond by closing the gap created by the absence of the LNG feedstock,” he said.
“And we are doing that by creating more levers like renewable energy of 1200MW we are targeting. We are working on sustainable feedstocks like the recent announcement with Anglo American. We are also working on offsets.”
Baloyi welcomed the commitment made in the draft budget of increasing offset allowances, saying it would allow SA to develop offset projects.
Sasol impaired a further R5bn in the six months ended December — after a hefty R35bn impairment in 2023.
The company reported a R600m impairment loss of the Sasolburg liquid fuels refinery cash generating unit.
Sasol also decided to exit the coal export market as it began a destoning project to improve the quality of its coal.
Updated: February 25
The story has been updated to reflect that it is Sasol’s emissions plans, and not that of Eskom.
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