Sasol Joins with Lurgi and Black Empowerment Group in South African Soy-Based Biodiesel Project

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Researched by Industrial Info Resources (Sugar Land, Texas). Two world leaders in their fields will combine in a project to build a 100,000-ton per year soya bean-based biodiesel production plant in South Africa. Sasol (NYSE:SSL) (Johannesburg, South Africa), the pioneer of CTL (coal-to-liquid) and GTL (gas-to-liquid) fuel production processes, has engaged Lurgi South Africa (Frankfurt, Germany) to study the viability of the plant before proceeding. Lurgi currently has 31 biodiesel plants under construction globally with a total capacity of 4.2 million tons per annum.

It is anticipated that a final decision pending possible construction of the plant will be made before the end of this year, and if given the go ahead, the chosen site options are Newcastle in Kwa-Zulu Natal province, Sasolburg or Secunda in the Free State province.

Bernard Klingenberg, Sasol Nitro managing director, said, ”We are already a significant supplier of alternative energy and are pleased to enter the field of renewable energy as part of our commitment to sustainability. We support the South African government’s commitment to diversify the energy mix towards renewable energy.”

Klingenberg said that the technology bids for the project were far higher than had been anticipated, negatively impacting the project economics. He said that this factor could hold back approval of the project. “Together with Lurgi, we are investigating opportunities to lower capital costs and improve efficiencies. Lurgi AG will only be given the go ahead for construction of the plant once its viability has been proven.”

Siyabanda Biodiesel, Limited (SB) has been signed by Sasol as its BEE (black economic empowerment) partner. In the venture, so far unnamed, Sasol will hold 37.5%, the state’s Central Energy Fund (CEF) 36.5% and SB 26%. SB is a wholly black-owned company with a majority of female directors. It is chaired by Dr. Danisa Baloyi. Since its formation four years ago the company wholesales petroleum products and is involved in various renewable energy projects including solar, gel fuel and fuel cells. It is also involved in the agricultural sector with the accent on support of emerging black farmers.

“Joining Sasol and CEF as partners in this venture means that we shall share in their knowledge of the petrochemical industry and the construction and operation of large-scale industrial plants. We look forward to playing our part in this exciting new industry,” said Madi Ramsamy, CEO of SB.

Manny Singh, general manager of the Energy Development Corporation, a CEF division, said that because the cost of producing biodiesel conventionally from crude oil, coal or natural gas, the European and U.S. governments subsidize its production. The South African government was aware of the situation and was working on a policy document to stimulate the biofuel industry.

The project will require 600,000 tons per annum of soya beans to produce 460,000 tpa of oil cake, a high protein animal feed. Local production of soya beans is currently standing at about 424,000 tpa. When the new plant is in operation total demand will rocket to 900,000 tpa, which will mean that significant amounts of soya beans will have to be imported until adequate local production targets are reached. BS has already started a campaign among emerging and commercial farmers in Kwa-Zulu Natal and Mpumulanga provinces to develop skills and obtain resources needed for the production of soya beans and more organizations will be contacted in efforts to boost production. The initiative will have a spin-off for emerging farmers in developing their production of protein for the local animal feed industry. A major effort will be made to create an economy of scale by encouraging high volume production as a means of lowering costs.

Sasol intends blending biodiesel with conventional diesel in very low ratios, which would require zero engine modification. In the B5 blend, 5% biodiesel is added to 95% conventional diesel blends. At the other end of the scale, B100 biodiesel is made of 100% soybean oil. When B100 is used there is some vehicle performance loss.

The new plant’s biodesel will be produced through the tranesterification. The addition of methanol, in the presence of a catalyst, converts the soya oil into biodiesel and glycerine, which is used in pharmaceutical, cosmetic and industrial applications.

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