Sasol chief executive David Constable. Photo: Simphiwe Mbokazi.
Sasol chief executive David Constable. Photo: Simphiwe Mbokazi.

Sasol to decide on US GTL plant in 2016

By Reuters Time of article published Oct 28, 2014

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Houston - South African petrochemicals group Sasol expects to make a final decision on whether to build a big gas-to-liquids (GTL) plant in Louisiana by 2016, chief executive David Constable said on Monday.

“We're still definitely seriously considering that plant for Louisiana. We need more accurate numbers,” Constable said in a telephone interview.

Separately, Sasol also announced plans to move ahead with an $8.1 billion (R89 billion) ethane cracker and chemical complex in Lake Charles, Louisiana.

The 96,000 barrels per day GTL plant, which would be the first of its kind in the United States, is still in the engineering and design phase and estimated to cost up to $14 billion, though the actual cost could be higher.

It also would be at Sasol's Louisiana site.

The GTL process involves converting natural gas to gasoline, jet fuel and diesel, as well as waxes, liquid petroleum gases such as propane and butane and naphtha, a building block for gasoline.

Constable said those products could be sold domestically or exported.

In 2012 when Sasol announced plans for both the ethane complex and the GTL plant, cost estimates were $5 billion to $7 billion for the cracker and associated units and $11 billion to $14 billion for the GTL facility.

Constable said Sasol the design phase also is examining ways to contain spending, and a more accurate cost estimate will emerge when that process wraps up.

Late last year, Royal Dutch Shell shelved plans for a GTL plant in Louisiana after costs surged from initial an initial estimate of $12.5 billion to $20 billion.

Shell said the company could not be sure natural gas prices would remain stay low enough to make the project economical.

GTL plants have been successful elsewhere, including Shell's huge 140,000 bpd plant in Qatar as well as two more in Malaysia. Sasol has a GTL plant in South Africa and joint venture GTL plants with Chevron in Qatar and Nigeria.

A glut of natural gas in North America prompted consideration of such plants in the United States as well.

But after Shell walked away from its US GTL plans last year, Sasol's GTL project is unique in its large scale planned in the United States.

Some smaller companies are considering more compact GTL operations closer to prolific natural gas fields.

Those include a 4,200 bpd GTL plant in Ashtabula, Ohio, and another with an undisclosed capacity near Oklahoma City by Velocys, which specialises in smaller scale GTL technology.

Privately held Marcellus GTL also is planning a 2,000 bpd GTL plant in Duncansville, Pennsylvania. - Reuters

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