It's full speed ahead on the U.S. Gulf Coast for Sasol Ltd., as the South African firm has given the final OK for a massive petrochemical project in Louisiana.
Johannesburg-based Sasol will spend $8.1 billion to develop an ethane cracker and six petrochemical plants in Lake Charles, officials said in an Oct. 27 news release from the firm and from the state.
The project will produce plastic feedstock ethylene — with annual capacity of 3.3 billion pounds — as well as related products. It's expected to create 500 direct jobs, almost 2,400 indirect jobs and about 5,000 construction jobs.
Sasol also will spend $800 million for infrastructure improvement, land acquisition and utility improvement costs at the site, bringing total costs to nearly $9 billion. Sasol also is considering building a new gas-to-liquids (GTL) complex in the area that would result in an additional investment of between $11 billion and $14 billion.
“The support we received from the local community and the State of Louisiana — particularly Governor [Bobby] Jindal and Louisiana Economic Development — was a major factor in our decision to expand our operations here,” CEO David Constable said in the release. “Louisiana's positive business climate, skilled workforce and robust energy infrastructure were also key in our ability to put down deep roots in Southwest Louisiana.”
Jindal added in the release that “thousands of high-paying construction jobs will be created by this world-scale chemical project, and thousands more permanent jobs will result when this ethane cracker complex begins operating in just a few short years.”
Sasol will receive a performance-based grant of $115 million from the state for land acquisition and infrastructure costs associated with the facility. The firm also will qualify for Louisiana's new Competitive Projects Payroll Incentive — which provides up to 15 percent payroll rebate for each GTL job — and the state's Quality Jobs Program, which offers up to 6 percent payroll rebate for each ethane cracker job. Those payroll incentives will be applied for up to 10 years.
Louisiana also is spending $20 million on a new training facility and associated equipment to support Sasol's workforce needs during construction and operations. The new facility will be located at SOWELA Technical Community College in Lake Charles. Jindal took part in a groundbreaking for the facility on Oct. 3.
Sasol also is expected to take part in Louisiana's Industrial Tax Exemption Program for both the ethylene and GTL facilities. Hiring for the ethane cracker complex will begin in 2015. Sasol will begin construction of the complex in early 2015 and launch commercial production of ethylene in 2018.
Sasol already employs almost 600 at a specialty chemicals plant in Lake Charles. Earlier this year, the firm announced it would build a high density polyethylene plant in LaPorte, Texas, through a partnership with Swiss petrochemicals firm Ineos Group.
Sasol joins the long list of global petrochemical firms taking advantage of low-priced natural gas feedstock in North America to build new ethylene and polyethylene assets.
It's also been a big week for Lake Charles. The Sasol announcement comes only four days after Westlake Chemical Corp. confirmed it would spend $330 million to add 250 million pounds of annual ethylene capacity at its site there. That project is expected to create 25 permanent jobs and 1,000 temporary construction jobs.
