S Africa’s Sasol enters talks to divest stake in Arya Sasol Polymers

30 November 2011 15:08  [Source: ICIS news]

LONDON (ICIS)--Sasol has entered into discussions to potentially divest its stake in its Iran-based joint venture Arya Sasol Polymers, the South African coal to oil and chemicals producer said on Wednesday.

Arya Sasol Polymer is a joint venture between Iran’s state-owned National Petrochemical Company (NPC) and Sasol. It operates a 1m tonne/year cracker, a 300,000 tonne/year low-density polyethylene (PE) plant and a 300,000 tonne/year medium-density PE/high-density PE unit in the Pars Special Economic Energy Zone.

Pars Petrochemical, a wholly-owned subsidiary of NPC, is also a partner in the joint venture and provides feedstock to Arya Sasol.

In a company update, chief financial officer Christine Ramon said that Sasol's first-quarter results for Arya Sasol Polymer were negatively influenced by the downtime required to modify the demethaniser column in the cracker section of its plant.

“For this reason, utilisation rates for the integrated facility were, on average, around 70% in the period. However, remedial work was completed successfully and the cracker has since concluded its full-rate trials and the plants are running steadily at higher rates,” she added.

“Reviewing our activities in Iran, Sasol has entered into discussions with a view to potentially divest of its stake in the Arya Sasol Polymer,” she said.

Ramon said further announcements will be made at a later date once sufficient progress has been made on discussions.

She also announced that the company continues to focus on strict cost management, adding that group cash-fixed costs for the first quarter of the 2012 financial year were lower in real terms than those of the first quarter of the same period a year before.

Last week, the US, UK and Canada made moves to impose further sanctions on Iran to curb its nuclear programme. Targeting the petrochemicals sector, the fresh sanctions aimed at non-US firms doing even minimal business with Iran.

Sasol also announced on Wednesday that its board of directors has approved a feasibility study for a possible grassroots cracker and derivatives complex at Lakes Charles, Louisiana. The project could cost between $3.5bn to 4.5bn (€2.6-3.4bn) and the feasibility study is scheduled for completion in the second half of 2013.

In a trading statement issued on 23 November 2011, Sasol estimated that earnings per share in the first half of its 2012 financial year, which ends on 31 December 2011, will be 45% higher than the year earlier comparable period.

Sasol said profitability in the 2012 year to date “has been enhanced by improved operational performance in certain businesses, the considerable improvement in oil and commodity prices and a weaker rand compared to the prior comparable period.”

($1 = €0.75)

By: Franco Capaldo
+44 (0)20 8652 3214

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