Sasol's Lake Charles on the cusp of completion

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Sasol's Lake Charles on the cusp of completion

Published Date: 2020-06-24 | Source: Stephen Gunnion | Author: Stephen Gunnion

Sasol's Lake Charles on the cusp of completion

The last remaining unit at the US project is on track for beneficial operation by the end of September.

Sasol says its Lake Charles Chemicals Project (LCCP) in the US is on the "cusp of completion" after its Guerbet alcohols unit achieved beneficial operation last Friday. As a result, 100% of LCCP's specialty chemicals units are now online and the entire project has become 86% operational.

The Guerbet unit is the 6th LCCP production until to be brought into production and has a nameplate capacity of 30,000 tons a year using the group's proprietary technology. Guerbet alcohols are a group of specialty branched alcohols. The energy and chemicals group has another Guerbet production site in Germany.

With its Ziegler unit achieving beneficial operation on 16 June, Sasol said the last remaining until to come online at Lake Charles would be the low density polyethylene plant, which was damaged during a fire in January. It said the unit was on track for beneficial operation by the end of September.

By the end of May, Sasol said capital expenditure for Lake Charles was tracking its previously communicated guidance of $12.8 billion. The project was expected to cost $8.9 billion when it took the decision to proceed with it in 2014. However, since then it has run into a series of problems, including delays, cost overruns and impairments. In an update in April, it warned that Lake Charles would probably make a loss this year. Due to price weakness as a result of the slide in the oil price and falling demand, it would report negative earnings before interest, tax, depreciation and amortisation (EBITDA) of between $50 million and $100 million this year. The group previously guided the market to expect positive EBITDA of $50-$100 million from the project.

Sasol's shares rose 5.3% to R147.57 yesterday.





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