Sasol Sustains Investment Plans with CTL and Fertilizer Projects

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Researched by Industrial Info Resources (Sugar Land, Texas)--Although oil and gas company Sasol Limited's (NYSE:SSL) (Johannesburg) results for the six months up to the end of December 2009 reflected tough market conditions and showed operating profits down 51% to $1.4 billion, capital expenditures were listed at $880 million and growth plans were still intact, said group chief executive Pat Davies. With cash still available, the interim dividend increased by 12% a share.

The proposed 80,000 barrel-per-day (BBL/d) coal-to-liquid (CTL) plant Project Mafutha had been factored into the government's plans, along with Petro S.A.'s proposed 400,000-BBL/d refinery project at the Coega industrial zone. Sasol, said Davies, was proceeding with preparatory work on the CTL project and had spent $133 million on the prefeasibility study, and in November 2009 had begun coal testing and extraction of samples.

Saying that the project was too big for Sasol to "go-it alone," Davies said Sasol already had an understanding with South Africa's Industrial Development Council and hoped that once the government had conducted its cost-benefit analysis, it would back the project with strong financial and general support.

Sasol also has submitted a project application report for the proposed Chinese CTL project, and the latest designs showed that the plant's output would be 90,000 BBL/d, up from the initial estimate of 80,000 BBL/d. Davies said that this would boost Sasol's total synfuel output.

Shortly after the results briefing, the company announced that Sasol Nitro had awarded an engineering, procurement and construction (EPC) contract to SNC-Lavalin Group (TSX:SNC) (Montreal, Quebec) for a new 400 million-ton-per-year calcium nitrate (CAN) production plant at the company's existing chemical complex in Secunda, South Africa. The Canadian company performed a conceptual study on the $93 million project in 2008 and followed this with basic engineering in 2009. Completion of the plant is scheduled for 2011.

A fluidized bed granulator designed by SNC-Lavalin's fertilizer division in Brussels will be used in the process where CAN, a specific concentrated fertilizer delivered in solid granules, is formed by mixing pure melted ammonium nitrate with an appropriate dolomite, then granulated.

Jean Claude Pingat, the executive vice president of SNC-Lavalin, said that the technology being used on the project yielded a high-quality product and achieved energy-efficient operations.

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