Update on Sasol’s Lake Charles Chemicals Project Ethane Cracker unit
Sasol Ordinary Share codes: JSE: SOL NYSE: SSL
Sasol Ordinary ISIN codes: ZAE000006896 US8038663006
Sasol BEE Ordinary Share code: JSE: SOLBE1
Sasol BEE Ordinary ISIN code: ZAE000151817
(Sasol or the Company)
Update on Sasol’s Lake Charles Chemicals Project (LCCP) Ethane Cracker unit
As noted in our 16 August 2019 communication, a problem relating to a large heat
exchanger on our Ethane Cracker which interrupted the start-up for several days
was successfully resolved and start-up resumed.
We are currently halfway through achieving our 72 hour beneficial operation
production test run on the Ethane Cracker.
On 24 August 2019, we reached the important milestone of producing ethylene at
the LCCP that meets the feedstock requirements of some of our downstream units.
However, the ethylene produced is marginally below polymer grade specification due
to the acetylene reactor system that is not performing as expected. Efforts to
upgrade ethylene to polymer grade specification are underway with the support of
the catalyst supplier and the technology licensor.
We are currently operating the plant stably at a capacity utilisation of around fifty
percent which is in line with our ramp-up plan. The ability to manage our facilities
and meet our production needs in the US as an integrated site, now allows us the
flexibility to consume this ethylene produced internally and to place it externally.
The further ramp up in volumes will be executed as these current operational issues
The completion of all other downstream derivative units has continued to advance.
However, schedule pressure is evident in most areas and the latest forecast for
beneficial operation dates of the units is provided below:
Low Density Polyethylene November 2019 (previously mid October 2019)
Ziegler January 2020 (previously January 2020)
Ethoxylates January 2020 (previously December 2019)
Guerbet March 2020 (previously February 2020)
As a consequence of these technical issues and the revised beneficial operation
dates, the LCCP earnings before interest, tax, depreciation and amortisation
(EBITDA) guidance for the 2020 financial year has been adjusted from US$300-350
million to US$150-300 million.
Notwithstanding the revisions to the beneficial operation dates, the cost guidance for
the LCCP of US$12,6-12,9 billion remains unchanged. We remain confident that the
incremental costs resulting from the delay can be absorbed within the existing base
cost and contingency buffer.
26 August 2019
Sponsor: Merrill Lynch South Africa Proprietary Limited
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Date: 26/08/2019 02:51:00
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