Houston and Johannesburg–LyondellBasell (NYSE: LYB), one of the largest plastics, chemicals and refining companies in the world, and Sasol (JSE: SOL, NYSE: SSL), a global integrated chemicals and energy company, today announced the closing of their Louisiana-based Integrated Polyethylene Joint Venture (JV) transaction following required regulatory and shareholder approvals. The 50/50 JV includes a 1.5 MM ton ethane cracker, 0.9 MM ton low-density and linear-low density polyethylene plants, and associated infrastructure near Lake Charles, La, and will toll manufacture the products on behalf of the two shareholders.
Under the terms of the transaction agreements, LyondellBasell will operate the three assets on behalf of the JV and market the polyethylene products on behalf of the two shareholders of the JV. Approximately 400 Sasol Lake Charles employees who directly support the JV assets are now employees of LyondellBasell.
“The formation of this JV is part of our approach to growing our core businesses while positioning the company to benefit from improving economic conditions,” said Bob Patel, CEO of LyondellBasell. “We believe our ability to operate efficiently and serve growing markets will create exceptional long-term value for our shareholders of both companies. We welcome our new JV employees to the LyondellBasell family.”
“This transaction accelerates the transformation of our chemicals business toward a focus on specialty chemicals,” said Fleetwood Grobler, Sasol President and Chief Executive Officer. “We’re proud of the world-scale assets we’ve built in Southwest Louisiana and look forward to working with LyondellBasell to realize their full potential and create value for all our stakeholders. We also extend our best wishes and gratitude to our colleagues who are transferring to LyondellBasell to operate the joint venture assets.”
The formation of this JV with Sasol aligns with LyondellBasell’s strategy of investing in high-quality assets in growing markets or feedstock advantaged regions. In September 2020, LyondellBasell established a 50/50 JV with China’s Liaoning Bora Enterprise Group to start up and operate a new, large petrochemical complex in northeast China. Taken together, the Bora and Sasol JVs is equivalent to the full capacity and immediate financial benefits of a new and operational world-scale integrated cracker complex.
This transaction is a significant step for Sasol in achieving its financial and strategic objectives toward creating Future Sasol, which will be a more sustainable and resilient business for the long-term.
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