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Sasol to go for FEED on Louisiana GTL and Ethane cracker project

Sasol to prioritize US GTL on Canada GTL project 

In a press conference in Louisiana, Sasol’s chief executive officer, David Constable, confirmed the decision of the board to move on the front end engineering and design (FEED) stage of the first Gas-To-Liquids (GTL) project to be built in USA.

To be located in its site of Lake Charles in Westlake of Calcasieu Parish in the southwest Louisiana, Sasol GTL project should include a GTL plant and a world scale ethane cracker to feed a petrochemical complex.

Sasol completed the feasibility study of this integrated GTL and petrochemical complex earlier in 2012 on an estimated base of $8 to 10 billion capital expenditure.

With a design capacity of 96,000 b/d the Louisana GTL project came out with a revised estimation somewhere between $16 and 21 billion.

Despite this cost escalation Sasol board is willing to move ahead with the project  and even with a higher priority than the Fort Saskatchewen GTL project in western Canada.

On the same format of a two phases project of 48,000 b/d each, for $8 billion capital expenditure, the Fort Saskatchewan GTL project had been initiated in 2010 for a feasibility study also completed in 2012.

In the Fort Saskatchewan GTL project, Sasol was associated in joint venture to Talisman Energy who decided in 2012 to step out in respect with the size of the project too large and complex for them.

In addition the Canadian project is affected by the slowdown of the development of the upstream phase of the project in the Farrel Creek and Cypress A shale gas fields because of the actual low market prices. 

Sasol Lake Charles GTL, Louisiana largest ever project 

In opposite way, the natural gas produced in US remains abundant and the over production of shale gas contribute to provide Sasol Lake Charles GTL and Ethane cracker project with a significant and sustainable competitive advantage.

Since the profitability of a GTL project is directly related to the spread between the gas price as feedstock and the crude oil prices that drive the revenues, USA appears as the best place ever.

With this GTL project, Sasol will bring in USA the most advanced liquid fuels and lubricants that would help the automotive sector to save energy and improve reliability.

By comparison with the world reference in GTL projects, Shell Pearl GTL had costed $18 billion capital expenditure for a capacity of 140,000 b/d.

To be located in Sasol Lake Charles GTL project would require $11 to 14 billion for 96,000 b/d in two phases.

The first one should come on stream on 2018 and the second one in 2019.

In parallel to the GTL plant, Sasol intents to also benefit from the low gas market prices in the US to build a world scale ethane cracker and petrochemical complex.

Estimated to call for $ 5 to 7 billion capital expenditure this Calcasieu Parish petrochemical complex would have a capacity of 1.5 million t/y ethylene.

Downstream the ethylene production, Sasol is planning olefin derivatives to optimize its proprietary technologies

With the FEED to begin in 2013, Sasol is aiming at final investment decision (FID) in 2014 for running at full capacity in 2017.

After the Oryx GTL project in Qatar,Sasol can envisage to benefit at larger scale of its proven expertise with the Louisiana Lake Charles GTL project.

 For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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