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Researched by Industrial Info Resources (Sugar Land, Texas)--Sasol Limited (NYSE:SSL) (Johannesburg, South Africa) is calling it quits on as much as $1 billion in high-profile projects it has deemed unprofitable, including its work in Canada's shale gas market and all of its gas-to-liquids (GTL) greenfield projects--notably its GTL project in Westlake, Louisiana. Industrial Info is tracking more than $43 billion in projects involving Sasol, including nearly $10 billion that are nearing or under construction.
The company is narrowing its focus to some of its most profitable assets, including specialty chemicals, upstream developments in Mozambique and western Africa, and liquid fuel retail in southern Africa. A years-long period of low oil prices prompted Sasol to indefinitely suspend its final investment decision on the estimated $14 billion GTL project in Westlake, Louisiana. As proposed, the $7 billion first unit would have processed natural gas from the Haynesville Shale to produce 48,000 barrels per day (BBL/d) of clean diesel, jet fuel and other liquid fuels; a $7 billion second unit with equal capacity also was considered.
Construction of the units, as scheduled, would have kicked off in the fourth quarters of 2018 and 2020, respectively, and wrapped up in the fourth quarters of 2022 and 2023. Sasol also was planning units for the production of base oils, plant wax, linear alkyl benzene and paraffins, each of which were scheduled to kick off in fourth-quarter 2018 and wrap up in fourth-quarter 2022. For more information, see Industrial Info's project reports on Unit 1 and Unit 2, and the units for base oils, plant wax, linear alkyl benzene and paraffins.
These developments do not affect Sasol's other major project in Louisiana: the roughly $11 billion Lake Charles Chemical Project (LCCP), which the company says is 79% complete and the largest-ever foreign investment in the U.S. from a South African company. A 1.5 million-ton-per-year ethylene unit would feed downstream units, including a 420,000-metric-ton-per-year low-density polyethylene unit and a 450,000-metric-ton-per-year linear low-density polyethylene (LLDPE) unit. For more information, see Industrial Info's project reports on the ethylene, LDPE and LLDPE units, and August 22, 2017, article - Sasol's Louisiana Petrochemical Project Reaches Milestone.
Canadian Shale Projects Get the Boot
Sasol says it decided earlier this month to sell its shale assets in Canada's Montney Basin, which covers much of eastern British Columbia and western Alberta. In divesting from these assets, which are valued at roughly $513 million, Sasol is following oil and gas majors, such as Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, Netherlands) and ConocoPhillips (NYSE:COP) (Houston, Texas), that have exited Alberta's oil sands region amid low prices and hefty drilling costs. For more information, see June 9, 2017, article - Canada Invites China to Invest in Alberta's Oil Sands, as $12 Billion in Projects Set to Kick Off by End of Year; May 5, 2017, article - Shell to Spend $25 Billion on Oil & Gas Projects in 2017 after Stronger Prices Boost Profits; and May 3, 2017, article - ConocoPhillips Makes Headway on Natural Gas Projects in Texas and Alaska as it Trims Capital Spending.
Sasol incurred a $715 million impairment in its 2016 earnings from its Montney Basin projects, and joint Chief Executive Officer Bongani Nqwababa told Reuters further write-downs were likely. Among the projects halted was a GTL plant in Fort Saskatchewan, Alberta, which, as designed, would have produced 48,000 BBL/d of liquid fuels from natural gas in British Columbia's share of the Montney Basin; a second-phase expansion under consideration would have doubled the capacity. For more information, see Industrial Info's project reports on the first and second phases.
Mozambique, Western Africa to See Project Growth
Sasol is pursuing growth opportunities in Mozambique and western Africa, where the company is invested in a variety of upstream, midstream and downstream projects. Among those nearing construction are a $120 million liquefied petroleum gas (LPG) complex in Inhambane, Mozambique, which would produce 15,000 BBL/d of condensates and store 20,000 tons per year of LPG, and a $20 million train addition at the nearby Temane Natural Gas Processing Plant, which would add 150 million standard cubic feet per day of capacity to the facility. For more information, see Industrial Info's project reports on the LPG complex and the Temane addition.
"To ensure we drive more of our own liquid fuel production through Sasol's retail network, where we enjoy higher margins, we will continue to aggressively grow our liquid fuels retail footprint in Southern Africa," Nqwababa said in a press release. "We will capitalize on our strong brand and existing cost advantage to achieve our retail fuels growth aspirations."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
The company is narrowing its focus to some of its most profitable assets, including specialty chemicals, upstream developments in Mozambique and western Africa, and liquid fuel retail in southern Africa. A years-long period of low oil prices prompted Sasol to indefinitely suspend its final investment decision on the estimated $14 billion GTL project in Westlake, Louisiana. As proposed, the $7 billion first unit would have processed natural gas from the Haynesville Shale to produce 48,000 barrels per day (BBL/d) of clean diesel, jet fuel and other liquid fuels; a $7 billion second unit with equal capacity also was considered.
Construction of the units, as scheduled, would have kicked off in the fourth quarters of 2018 and 2020, respectively, and wrapped up in the fourth quarters of 2022 and 2023. Sasol also was planning units for the production of base oils, plant wax, linear alkyl benzene and paraffins, each of which were scheduled to kick off in fourth-quarter 2018 and wrap up in fourth-quarter 2022. For more information, see Industrial Info's project reports on Unit 1 and Unit 2, and the units for base oils, plant wax, linear alkyl benzene and paraffins.
These developments do not affect Sasol's other major project in Louisiana: the roughly $11 billion Lake Charles Chemical Project (LCCP), which the company says is 79% complete and the largest-ever foreign investment in the U.S. from a South African company. A 1.5 million-ton-per-year ethylene unit would feed downstream units, including a 420,000-metric-ton-per-year low-density polyethylene unit and a 450,000-metric-ton-per-year linear low-density polyethylene (LLDPE) unit. For more information, see Industrial Info's project reports on the ethylene, LDPE and LLDPE units, and August 22, 2017, article - Sasol's Louisiana Petrochemical Project Reaches Milestone.
Canadian Shale Projects Get the Boot
Sasol says it decided earlier this month to sell its shale assets in Canada's Montney Basin, which covers much of eastern British Columbia and western Alberta. In divesting from these assets, which are valued at roughly $513 million, Sasol is following oil and gas majors, such as Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, Netherlands) and ConocoPhillips (NYSE:COP) (Houston, Texas), that have exited Alberta's oil sands region amid low prices and hefty drilling costs. For more information, see June 9, 2017, article - Canada Invites China to Invest in Alberta's Oil Sands, as $12 Billion in Projects Set to Kick Off by End of Year; May 5, 2017, article - Shell to Spend $25 Billion on Oil & Gas Projects in 2017 after Stronger Prices Boost Profits; and May 3, 2017, article - ConocoPhillips Makes Headway on Natural Gas Projects in Texas and Alaska as it Trims Capital Spending.
Sasol incurred a $715 million impairment in its 2016 earnings from its Montney Basin projects, and joint Chief Executive Officer Bongani Nqwababa told Reuters further write-downs were likely. Among the projects halted was a GTL plant in Fort Saskatchewan, Alberta, which, as designed, would have produced 48,000 BBL/d of liquid fuels from natural gas in British Columbia's share of the Montney Basin; a second-phase expansion under consideration would have doubled the capacity. For more information, see Industrial Info's project reports on the first and second phases.
Mozambique, Western Africa to See Project Growth
Sasol is pursuing growth opportunities in Mozambique and western Africa, where the company is invested in a variety of upstream, midstream and downstream projects. Among those nearing construction are a $120 million liquefied petroleum gas (LPG) complex in Inhambane, Mozambique, which would produce 15,000 BBL/d of condensates and store 20,000 tons per year of LPG, and a $20 million train addition at the nearby Temane Natural Gas Processing Plant, which would add 150 million standard cubic feet per day of capacity to the facility. For more information, see Industrial Info's project reports on the LPG complex and the Temane addition.
"To ensure we drive more of our own liquid fuel production through Sasol's retail network, where we enjoy higher margins, we will continue to aggressively grow our liquid fuels retail footprint in Southern Africa," Nqwababa said in a press release. "We will capitalize on our strong brand and existing cost advantage to achieve our retail fuels growth aspirations."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
