Sasol Ltd. has started production on a new unit making low density polyethylene resin in Lake Charles, La.
Officials with Sasol in Johannesburg, South Africa, said that the unit began operating on Nov. 15. It is the final line to open in Sasol's Lake Charles chemical complex. The firm has invested $12.8 billion in Lake Charles.
The line has annual production capacity of about 925 million pounds. It will make LDPE used in bags, shrink wrap and stretch film, coatings for paper cups and cartons, container lids, squeezable bottles and other applications. The unit uses technology licensed from ExxonMobil Chemical Co.
The new LDPE unit will be part of Louisiana Integrated Polyethylene, a joint venture that Sasol formed with LyondellBasell Industries in early October. Houston-based Lyondell paid $2 billion for its stake in the 50/50 JV. The site also includes 1 billion pounds of linear LDPE production and 3 billion pounds of ethylene, a plastic feedstock.
The Lake Charles site — which will be operated by LyondellBasell — employs 800 and had employed 6,500 during construction. Completion of the project was affected by hurricanes that have hit the Lake Charles area since late August.
Building the Lake Charles site didn't work out as Sasol had planned. Major cost overruns on the project led to financial problems and the ouster of co-CEOs Bongani Nqwababa and Stephen Cornell in late 2019. The company's situation worsened this year because of the COVID-19 pandemic and low oil prices.
In a news release, Sasol President and CEO Fleetwood Grobler said that completion of the LDPE unit and its transition to the JV "will accelerate our transformation to a more specialty chemicals-focused company with a strong presence of base chemicals in our portfolio."
LyondellBasell CEO Bob Patel said in early October that that the Lake Charles site complements his firm's existing PE production, which is mostly high density PE. Patel added that the investment "represents a unique opportunity to bring together the best of both companies and create deep, long-term value while immediately realizing the many benefits of new, strategically located, world-scale assets."