Sell-off setback after blast, fire at Sasol’s US-based chemical project
The market reacted badly to the latest news – despite the group saying that the fire had been extinguished – with the stock falling 2.43 percent to close at R301 on the JSE on Tuesday. The group has had a tough time with the Lake Charles Project in the US, with cost over-runs and completion delays.
The group said there had been minimal damage and confirmed the safety of the plant and its employees, after the incident on Monday. It said that the fire came as the low-density polyethylene unit was being prepped and had not yet achieved beneficial operation as planned for last month.
“The unit was in the final stages of commissioning and start-up when the incident occurred. The unit has been shut down and an investigation is under way to determine the cause of the explosion and fire, and the extent of the damage and resulting impact on the unit’s operations schedule,” Sasol said.
All its other Lake Charles units and previously commissioned units, namely the ethane cracker, ethylene glycol/ethylene oxide and linear low-density polyethylene units were unaffected and operating to plan.
“The ethane cracker has achieved nameplate capacity following the successful replacement of the acetylene reactor catalyst in the plant in December,” it said.
This is the latest setback for the chemical project.
In October, then Sasol joint chief executives Stephen Cornell and Bongani Nqwababa resigned amid shareholder pressure after a review of the project had determined that it was likely to cost up to $12.9 billion (R185.3bn) to complete, a significant increase on the initially planned $8.9bn.
Sasol said progress was still ongoing on the remaining three downstream units under construction in order to complete the integrated project.