Corrected: Sasol plans US PE, EO, EG, alcohols units along with new cracker

Correction: In the ICIS story headlined “Sasol plans US PE, EO, EG, alcohols units along with new cracker” dated 27 October 2014, please read in the fifth paragraph … 300,000 tonnes/year of ethoxylates and alcohols, including its Ziegler and Guerbet alcohols … instead of … 300,000 tonnes/year of its Ziegler and Guerbert alcohols, … A corrected story follows.

HOUSTON (ICIS)–Sasol plans to produce about 75% commodity chemicals and 25% specialty alcohols at an $8.1bn ethane cracker and derivatives complex planned near its current facility in Lake Charles, Louisiana, an executive with the company said on Monday.

Sasol had earlier on Monday announced it had made a final investment decision on the project, which includes a 1.5m tonne/year ethane cracker and six chemical manufacturing plants.

The company plans units able to produce about 900,000 tonnes/year of polyethylene (PE), with an even split between low density PE (LDPE) and linear low density PE (LLDPE), Steven Cornell, executive vice president, international operations, said during a news conference call.

Sasol also plans units to make about 300,000 tonnes/year of ethylene oxide (EO) and its derivative ethylene glycol (EG) in a ratio adjustable as the market dictates.

For the company’s specialty alcohols, Sasol plans units to make about 300,000 tonnes/year of ethoxylates and alcohols, including its Ziegler and Guerbet alcohols which are used in detergents.

An ethylene overhang of about 100,000 is expected, which would be sold on the merchant market.

Sasol decided against alpha olefins as part of this project, but “would be in a good position to consider that going forward”, Fleetwood Grobler, executive vice president, chemicals business, said during the call.

“We will have the opportunity to continue to expand this site,” Cornell said. “We’re setting up the site to be really our major hub in North America.”

The $8.1b project might seem like a higher investment cost than a comparable facility with just PE units to produce derivatives, but the specialty alcohols are in very high demand in the US and have very high margins, Cornell said.  

“But it requires an additional investment downstream in order to capture that,” he said.

The company is confident in its estimates for the project after having considered the tight labour market and that several other projects have been announced in the US Gulf coast region. Building next to their existing plant means Sasol already has good relationships with local contractors.

Design, procurement and construction work will be done by a joint partnership of Fluor-Technip. Modular work, with pieces being built off-site and shipped in for installation, will help keep costs down,  Cornell said.

“We believe we’ve got good contractors to work with and a good contracting strategy,” Cornell said.

Startup of the facility is expected to be phased over six months. The earliest part, one of the derivative units, could be on line near the end of 2017 and use ethylene feedstocks from Sasol’s current facility.

The company declined to comment on which unit would be the first for start-up.

The ethane cracker is planned for startup in the second quarter of 2018 and the last of derivative units should follow in the second quarter of 2018.