[ad_1]
A file photo of the construction of the Sasol ethane cracking plant at the Lake Charles Chemicals Project in Louisiana. (Photo: Sasol)
- Sasol has been working on a chemical project in Louisiana for a decade.
- Estimates of its final cost are now $ 13 billion, the equivalent of R214 billion.
- That’s almost half, before he made a “worst case” prediction of $ 11 billion in 2016.
- On Friday, Sasol announced a plan to sell half of its stake in key Lake Charles assets to LyondellBasell Industries to help with its debt.
- Here’s a timeline of how Sasol came to offer the assets for sale.
- For more stories, visit www.BusinessInsider.co.za.
It began, a decade ago, with a plan to produce hexane from ethylene. Then it became more complex, more complicated, and ultimately more than Sasol could handle on his own.
On Friday, Sasol announced that it would sell 50% of Lake Charles’ key assets to LyondellBasell Industries.
This is how Sasol’s Lake Charles project evolved, over a decade, from a one-of-a-kind plant to a mega-complex, and to become a debt millstone around its neck.
2010
Sasol’s board announces plans to build a new unit at the Lake Charles chemical complex in Westlake, Louisiana. The unit will use a unique technology designed by Sasol engineers to produce hexane from ethylene, he says.
2011
In May 2011, Sasol announced the appointment of David Constable as CEO replacing Pat Davies. At the time, Constable was president of the operations group at Fluor Corporation, where he had worked for nearly 30 years.
In September 2011, Sasol Managing Director for New Business Development Ernest Oberholster and Louisiana Governor Bobby Jindal visit the Lake Charles Chemical Complex and jointly announce that Sasol approved an 18-month feasibility study for a gas-to-liquids conversion plant, expected to start operations in 2017.
By November of that year, Sasol begins construction of the world’s first tetramerization unit to produce monomers in Lake Charles, which is expected to be operational in 2014. Sasol also says it will begin to study the construction of a giant ethane cracker in the same area. .
2012
As of September 2012, Sasol says that feasibility studies for the gas into liquids and chemicals plant, as well as the ethane and ethylene derivatives cracking plant, are in progress and will be completed by the end of the year.
In December 2012, Sasol says its board granted approval to move to the engineering and design phase of the facilities. The combined cost is estimated at more than $ 14 billion.
2014
In October 2014 Sasol says he has approval for the construction of the ethane cracker and chemical plant, for $ 8.9 billion. The contract for the engineering, procurement and construction management of the ethane and derivatives cracking plant is awarded to a joint venture between Technip and Fluor, former employer of CEO David Constable.
Sasol also says that if the gas-to-liquids plant also continues, the total cost of the combined project will rise to $ 22 billion, touted as the largest industrial company in Louisiana history. Sasol says he will make a decision on the gas-to-liquids project within two years.
2015
In January 2015, Sasol says it will delay its decision on the gas-to-liquids plant, which at this point is estimated to cost an additional $ 14 billion on top of the $ 8.9 billion earmarked for the ethane cracking plant. and chemistry, due to a collapse in oil prices.
In March 2015, Sasol announced plans to cut 1,500 jobs across its operations, though most would be in South Africa, in an effort to preserve cash amid falling oil prices.
In June 2015 Sasol announced that President and CEO David Constable will not renew his contract with the company, which expires on May 31, 2016.
By December 2015, Sasol announces that Constable will be replaced by Bongani Nqwababa and Stephen Cornell.
2016
Sasol announced in March 2016 that some units at its ethane cracking plant would only open in the second half of 2019, one year later than originally planned, due to the impact of lower oil prices on its finances. CEO Constable says a cost review for the facility is underway and will be completed by the end of the year.
By August 2016, Sasol says it had raised its cost estimate to a “worst case” of $ 11 billion, a quarter more than the $ 8.9 billion that shareholders had originally expected.
2017
In November 2017, Sasol abandons plans to build a gas-to-liquids plant in Lake Charles, which would have cost up to $ 15 billion, as the lower-than-anticipated cost of oil has made the project unsuccessful. viable. Instead, it says it will focus on finishing its ethane cracker and chemical plant, which was now expected to cost $ 11.1 billion.
2019
By February 2019, Sasol says the Lake Charles chemical plant project will now cost $ 11.8 billion.
In May 2019, Sasol reveals that the cost will, in fact, increase to $ 12.9 billion.
On August 16, 2019, Sasol’s stock fell 16% after the company said it will delay the release of its annual financial results, which were due to be released on August 19, to allow it to complete an in-depth investigation of Lake Charles.
In early September 2019, Sasol delayed his results for the second time, no later than October 31, 2019, saying he needs more time to complete his investigation.
On October 28, 2019, Sasol announced that Joint CEOs Bongani Nqwababa and Stephen Cornell will be leaving the company at the end of the month following a review that uncovered mismanagement related to rising costs at Lake Charles. They are replaced by Fleetwood Grobler, executive vice president of chemicals.
2020
Sasol’s share price nearly halved in early March 2020 due to falling oil prices following Saudi Arabia’s decision to escalate an oil price war with Russia.
In August 2020, Sasol reports an annual loss of R91.3 billion and says it suffered R112 billion in write-offs of Lake Charles-related assets.
In October 2020, Sasol announces a plan to sell a $ 2 billion stake to LyondellBasell Industries to help with its debt, making it a 50% shareholder in the three key units of Lake Charles, the ethane cracker of the project and two polyethylene plants.
Lake Charles now has an estimated cost of $ 13 billion.
* This article has been updated to reflect that LyondellBasell is purchasing a 50% interest in the three key units of Lake Charles.
Receive a daily update on your cell phone with all our latest news – click here.
Get the best of our site by email daily: Click here.
Also from Business Insider South Africa:
[ad_2]
