Completion of the ambitious shale gas-driven ethane cracker project being pursued by South African energy and petrochemicals producer Sasol (Johannesburg; www.sasol.com) at Lake Charles, Louisiana / USA is lagging a bit behind schedule, impacted by the US hurricane season in 2017. The first of seven production units, a 470,000 t/y LLDPE facility, started up on 13 February 2019. The remaining plants are due to come online over the course of this year. Sasol said the cost of the project has risen steadily and is now expected to be almost USD 12 bn. When completed, the investment will comprise a gas-fed cracker for 1.5m t/y of ethylene and 900,000 t/y of polyethylene.

In the seven years since 2012, when the plans were first broached – see Plasteurope.com of 07.12.2012 – start-up dates have been repeatedly pushed back. At one point it looked as if some of the investment could be scrapped, as, ironically, the abundant supply of shale gas – the cracker project’s raison d’être – has caused oil prices to drop, making the calculation less competitive. Reporting Q4 financial results in December 2018, Sasol also blamed excessive rainfall, high absenteeism around public holidays and "late scope additions” to the cracker. Prior to this, in Q1 2016, it said start-up of some of the units had been delayed to 2019 – see Plasteurope.com of 11.03.2016.

According to a revised timetable published on 8 February 2019, the cracker is now projected to go onstream in July, rather than February. The 300,000 t/y ethylene oxide/glycol facility has been delayed to June (from February) and the 420,000 t/y LDPE plant to August (from March). The two speciality alcohols plants are now due to start up in November 2019 and January 2020, respectively.

Throughout the process, management has repeatedly stressed that the hub on the US Gulf will be competitive. Sasol’s biggest-ever project is aimed at shifting its portfolio balance from energy to chemicals. With start-up of the new complex, the share of chemicals in overall revenue is expected to rise to more than 70% of the group total. Lake Charles previously was envisaged to generate EBITDA of USD 110-160m in the financial year ending 30 June 2019, but Sasol now expects to report a loss of USD 165-195m for the period.