South Africa-based Sasol Ltd. made a final investment decision to develop an $8.1 billion petrochemical complex consisting of an ethane cracker and six chemical manufacturing plants near its existing Westlake, Louisiana, production facilities.
The ethane cracker is one of two projects announced in December 2012 during the feasibility stage, with the other being a gas-to-liquids facility that would increase the total number of new direct jobs to more than 1,250. While making a definitive announcement now to build the ethane cracker complex, Sasol estimates it will make a final investment decision on the estimated $11 billion to $14 billion GTL project within 24 months. Sasol also is retaining 435 existing chemical manufacturing jobs in Westlake with the new ethane cracker project, which was approved by the company’s board of directors in South Africa.
In addition to the $8.1 billion capital investment for the petrochemical complex, Sasol will spend $800 million for infrastructure improvement, land acquisition and utility improvement costs at the site, bringing total site costs for this project to nearly $9 billion.
Governor Bobby Jindal said, “We are proud that Sasol is following through with its commitment to invest in this historic manufacturing project, and that the company is developing a project to the highest environmental standards in our state’s history. 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’s ethane cracker complex will produce 1.5 million tons of ethylene annually, with approximately 90 percent of the complex’s ethylene output converted into a broad range of chemicals used to make everyday products such as detergents, lotions, cleaners, packaging, paints and adhesives. The new Louisiana project will result in a significant impact on the South African company’s chemical production and workforce in the United States, where Sasol’s employment will grow 50 percent, state economic development officials said.
“The support we received from the local community and the State of Louisiana, particularly Governor Jindal and Louisiana Economic Development, was a major factor in our decision to expand our operations here,” Sasol Ltd. President/CEO David Constable said. “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."
To secure both the GTL and the ethane cracker projects, Louisiana offered Sasol 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, the state workforce training program. In addition, the company will qualify for Louisiana’s new Competitive Projects Payroll Incentive, up to 15 percent payroll rebate for each GTL job. The project also qualifies for the state’s Quality Jobs Program of up to 6 percent payroll rebate for each ethane cracker job, with the payroll incentives applied for up to 10 years. To support Sasol’s workforce needs during construction and operations, the state is investing $20 million for a new training facility and associated equipment focused on industrial technology at SOWELA Technical Community College in Lake Charles.
Based in Johannesburg, Sasol has been an innovator in coals-to-liquids and gas-to-liquids processes since the 1950s. Through its Sasol North America Inc. subsidiary, the company supports more than 550 existing direct and contract jobs at its Lake Charles Chemical Complex.
“This is one of the most significant days in the industrial history of Southwest Louisiana,” said President/CEO George Swift of the Southwest Louisiana Economic Development Alliance. “Sasol has provided products and jobs in our region. Today’s announcement puts us on the road for more tremendous development with their mega-projects. We are pleased to have worked with Sasol officials in the past and look forward to assisting in any way needed for all of their projects to come to fruition.”