Sasol (Johannesburg / South Africa; www.sasol.com) is advancing plans to build an ethane cracker and derivatives complex at its site in Lake Charles, Louisiana / USA. The South African energy and chemicals group said it had completed a pre-feasibility study for the project and is progressing to the feasibility study phase.

“The Sasol board of directors has approved the advancement of this project into a feasibility study, to assess in more detail the technical and commercial viability of such a world-scale ethane cracker and the development of strategic partnerships at an appropriate level,” CFO Christine Ramon said in an update on the company’s Q1 performance. The feasibility study is expected to be completed in the second half of 2013. With an ethylene capacity of 1-1.4m t/y, the project is expected to cost between USD 3.5 bn (EUR 2.6 bn) and USD 4.5 bn, she said.

“The rapid development of the shale gas industry in North America and the resulting decoupling of the crude oil and natural gas prices have created several opportunities for growth for Sasol in both fuels and chemicals,” Ramon remarked. “In particular, the availability of significant volumes of natural gas liquids, and specifically ethane, has opened up opportunities in the ethane feedstock area for cracker-based chemicals.”

Sasol also announced plans to divest its stake in Arya Sasol Polymer (Assaluyeh / Iran; www.aryasasol.com), a joint venture with Iran’s National Petrochemical Company (NPC, Tehran / Iran; www.nipc.net). The joint venture operates a 1m t/y cracker, a 300,000 t/y LDPE plant and a 300,000 t/y MDPE/HDPE plant in the Pars Special Economic Energy Zone (www.pseez.ir) near Assaluyeh.

“We previously announced our intention to review our investment in Iran and we have subsequently entered into discussions to potentially divest our stake in Arya Sasol Polymer,” Ramon said. Sasol will provide an update on the proposed divestment once sufficient progress has been made with these discussions, she added. Sasol said in a regulatory filing to the US Securities and Exchange Commission (SEC) in October that it was reviewing operations in Iran given US and EU sanctions against the country.

Arya Sasol Polymer’s Q1 results were impacted by downtime required to modify the cracker’s demethaniser column, Ramon said. As a result, utilisation rates for the integrated facility averaged about 70% for the three month period ending 30 September. However, the remedial work has now been completed, she said, and the plants are running steadily and at higher rates.