Construction on South African energy and chemicals group Sasol’s $7-billion ethane cracker, located in the US state of Louisiana, will start in 2014, following the final investment decision.

Sasol CEO David Constable pointed out that this forms part of Sasol’s strategy to build globally competitive downstream facilities and adds value to the already low cost of the ethylene production opportunity in North America.

He stated at the Sasol financial results presentation, which was held in Johannesburg last month, that the petrochemicals company was in the process of the front-end engineering and design (FEED) of its ethane cracker and derivatives project.

“Sasol’s US growth projects, which also include the construction of a gas-to-liquids (GTL) plant in Louisiana, are large, and Sasol is fully aware of the importance of focusing on their successful completion.

“This being the case, Sasol’s management team embarked on a thorough review of our entire project portfolio and began a carefully considered prioritisation process,” he said, adding that the purpose of this exercise was to ensure that Sasol advanced projects that could unlock the most value for the com- pany’s shareholders over the long term.

“Based on our review, and particularly the financial and human capital requirements of our various projects, as well as our near- to longer-term strategic direction, we were unanimous as a management team, as was the board, to proceed with the FEED work on our US projects,” Constable noted.

He pointed out that the company achieved several key milestones on a range of chemi- cals projects in South Africa and the US.

“Later this month, we will be opening the FT wax expansion catalyst plant and next month we will be inaugurating the tetramerisation plant in Lake Charles. We are progressing well with the FEED phase of our US ethane cracker,” he says.

The facility, which would break natural gas into smaller molecules to make ethylene, would produce 1.5-million tons of ethylene a year and was expected to achieve beneficial operation by 2017.

“This is the largest manufacturing investment in the history of Louisiana and it also represents one of the largest foreign direct investment manufacturing projects in the history of the entire US,” said Louisiana governor Bobby Jindal last year.

He added that the plant was expected to create more than 1 250 direct jobs with an average yearly salary of nearly $88 000, including benefits.

The ethylene manufactured at the plant will be used in seven downstream derivative plants to produce a range of high-value derivatives used in everyday products such as synthetic fibres, detergents, fragrances, paints, film and food packaging.

US engineering group Fluor won a $120-million FEED contract for the project and is its main FEED contractor.

Meanwhile, individual engineering services agreements for the development of basic engineering packages have been concluded with engineering company Toyo Engineering Corporation for the linear low-density polyethylene plant, engineering company Mitsui Engineering & Shipbuilding, for the low-density polyethylene plant, and electronics manufacturer Samsung Engineering America, for the ethylene oxide and mono- ethylene glycol units.

“We are happy to be working with these contractors and technology partners in executing our project,” said Sasol executive VP for US megaprojects Johan du Preez.

Sasol will use its own proprietary technolo- gies for the tetramerisation, Ziegler alcohol and Guerbet alcohol units, while process automation services and technologies manu- facturer Emerson Process Management has been appointed as the main automation contractor for the project.

Engineering firm WorleyParsons has been contracted to support Sasol’s own project execution team as part of an integrated project management team.

“The ethylene produced in the chemicals facility will be used to make a range of high-value derivatives in world-scale plants,” said Sasol senior group executive for global chemi- cals and North American operations André de Ruyter.

Sasol’s ethane cracker will enable the group to benefit from cheap natural gas despite global overcapacity in the chemicals market.

Low US gas prices, owing to a boom in exploration for shale gas reserves using hydraulic fracturing, were behind a project pipeline of about $100-billion in gas, oil and chemicals, said De Ruyter.

US gas costs $3.75 for every million British thermal units, compared with $16 in Asia and $11 in Europe.

De Ruyter added that the low cost and abundance of gas in the US would enable the market to remain competitive in chemicals manufacturing.

Giving Back

Each year, Sasol North America donates more than $300 000 to local nonprofit organisations and is a major contributor to the economy of Southwest Louisiana as a result of yearly taxes and the buying of goods and services totalling more than $160-million.

The company is working to develop and promote people-centered, needs-driven, long-term sustainable programmes through the development of a corporate social responsibility initiative.