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South African Energy Firm Plans to create 7,000+ Jobs with $16-$20 Billion Investment in Louisiana Ethane Cracker

Area Development Online News Desk (12/03/2012)
A South African-based integrated energy and chemical producer, Sasol Ltd., plans to invest between $16 billion and $21 billion to develop an integrated GTL and ethane cracker complex in Westlake, Louisiana, expected to create 1,253 direct jobs and an estimated 5,886 indirect jobs.

The GTL facility, the first of its kind in the U.S., will produce high quality transportation fuels, including GTL diesel, as well as other value-adding chemical products. GTL diesel is a cleaner-burning, high-performance fuel with significant emission reduction benefits. GTL diesel can be used in existing vehicles and fuel delivery infrastructure without modifications.

The project will consist of an integrated, 96,000 barrels-per-day GTL facility representing a capital investment of between $11 billion and $14 billion, as well as an ethane cracker representing a capital investment of $5 billion to $7 billion. The GTL project will be delivered in a phased approach, with phase one delivering the first 48,000 barrels per day and phase two delivering the remaining production capacity. The ethane cracker will produce 1.5 million tons per annum of ethylene, one of the chemical industry's key buildings blocks for alcohol- and plastics-based products, including solvents, surfactants and polymers.

"Utilizing Sasol's innovative energy and chemicals technologies, these planned projects will unlock the potential of the continent's abundant natural gas resources," Sasol Ltd. CEO David Constable said. "By incorporating GTL technology into the USA's energy mix, states such as Louisiana will be able to advance the country's energy independence, through a diversification of supply. We greatly appreciate the support we have received from the State of Louisiana and Governor Jindal, along with the people of Calcasieu Parish, in reaching these significant project milestones. We look forward to furthering our interests in the region, and continuing our engagement with all our stakeholders."

Gov. Bobby Jindal said; "Today is a great day for Westlake, Calcasieu Parish and our entire state. Today's announcement is not only one of the most exciting announcements in the history of Southwest Louisiana, but one of the most significant economic development wins our state, and our nation has ever recorded. Sasol is one of many energy companies that is expanding in Louisiana because of our world class energy infrastructure, strong business climate and incomparable workforce.

"This project will be the largest single manufacturing investment in the history of Louisiana and it also represents one of the largest foreign direct investment manufacturing projects in the history of the entire United States. Despite a national economic downturn, this historic economic development win is happening in Louisiana because we have been laser focused on job creation by creating an environment where businesses want to invest and create jobs for our people," The Governor said.

As an incentive to secure the project, Louisiana offered Sasol a custom incentive package that includes a performance-based grant of $115 million for land acquisition and infrastructure costs associated with the facility. Sasol also will receive the services of LED FastStart. In addition, the company will qualify for Louisiana's new Competitive Projects Payroll Incentive of up to 15 percent payroll rebate for each GTL job and Quality Jobs Program of up to 6 percent payroll rebate for each ethane cracker job. To support the project's workforce needs during construction and operations, the state will be investing $20 million for a new training facility and associated equipment focused on industrial technology at SOWELA Technical Community College in Lake Charles. Finally, Sasol is expected to utilize the Industrial Tax Exemption Program for both the GTL and the ethylene facilities.

Hiring for the GTL and ethane cracker facilities will begin in 2014. Operations of the first plant are expected to start in 2017, with full employment reached within two years after commercial operations begin.
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