Sasol reaches beneficial operations for Lake Charles’ Guerbet alcohols unit

LONDON (ICIS)–Sasol has achieved beneficial operation at its Lake Charles, Louisiana, Guerbet alcohols unit, one of the last units to be brought online at the petrochemicals complex.

The unit is the sixth to be brought onstream at the site, with a nameplate capacity of 30,000 tonnes/year.

The company said on 18 June it had also achieved beneficial operation at Ziegler, its other alcohols unit at Lake Charles.

All plants at the site are now operational aside from the low-density polyethylene (LDPE) unit which suffered an explosion during the commissioning process in January.

The LDPE plant, which will be the last unit to come online at the complex, is likely to have reached beneficial operation by September this year.

Sasol has been beset by delays in bringing Lake Charles onstream, with initial estimates for the guerbet alcohols unit estimating that it would be operational by the  second  half of 2019, while earlier estimates for the LDPE unit projected that it would be online by March 2019.

Development of the complex has been hindered by technical errors, poor weather during the construction phase, and worker absenteeism, with costs ballooning from the mid-$9bn level to nearly $13bn.

Former joint Sasol CEOs Bongani Nqwababa and Stephen Cornell resigned last year amid the commencement of a full enquiry into what had gone wrong at the site, which has proven such a debacle that the company has stated plans to restrict future projects to the $500m-1bn range.

The delays and cost overruns mean that the company’s debt to earnings multiples reached their highest levels in the process amid historic downturns for oil prices and the global economy.

The company announced last week that it had successfully negotiated with creditors to raise its debt ceiling on the basis that it prioritises debt reduction and will hold back from dividend payments and acquisitions until leverage levels fall below three times earnings.

Sasol is also currently in talks about a buyer for a significant stake in the Lake Charles complex.