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Sasol outlines Lake Charles production hit from hurricanes, first quarter volumes

October 23/2020

MOSCOW (MRC) -- Sasol (Johannesburg, South Africa) says it has taken a hit of approximately 170,000 net saleable tons on its operations at Lake Charles, Louisiana, due to the impact of Hurricanes Laura and Delta, reported Chemweek.

The impact of the hurricanes on its North American operations was outlined in a quarterly production and sales update for the first quarter of its 2021 financial year, ended 30 September. Sasol says seven of its chemical manufacturing units at Lake Charles have returned to operation, with all remaining units that were operating prior to Hurricane Laura “expected to return to operation by end October.” The availability of “sufficient industrial-level power from the local provider” resulted in the commencement of a coordinated startup of the chemicals complex, it says.

Commissioning activities at the last new unit planned to come online at the company’s Lake Charles Chemicals Project (LCCP), a low-density polyethylene (LDPE) unit, are continuing, with beneficial operation “still trending” towards the end of this month, it adds.

Sasol says its group base chemicals business saw first quarter sales volumes rise 4% year on year (YOY), due to improved market demand and supported by higher production rates following the lifting of COVID-19 lockdown restrictions.

The company excludes US polymers product sales volumes from this figure. US polymers sales volumes in the quarter were 65% higher YOY at 306,000 metric tons “due to the new ethylene cracker which achieved beneficial operation in August 2019,” it says. The first-quarter US polymers sales volumes were 28% lower than the previous quarter to end June due to the impact of Hurricane Laura, it adds. US polymers sales volumes totaled 1.26 million metric tons for the full-year 2020. The US polymers average sales basket price declined 29% YOY to SD551/metric ton.

Sasol’s group base chemicals average sales basket price for the quarter fell 15% YOY to USD630/metric ton. Base chemicals sales volumes, excluding US polymers, are expected to be 1-2% higher than the prior-year quarter.

In the first quarter, Sasol’s east cracker at Lake Charles produced 67,000 metric tons of ethylene, down 41% YOY, while its newer west cracker produced 217,000 metric tons of ethylene, up from 44,000 metric tons in the prior-year period. Polyethylene (PE) production, including its share of high-density polyethylene (HDPE) declined 24% YOY to 132,000 metric tons, while its ethylene oxide (EO) value chain saw output fall 29% YOY to 67,000 metric tons. Production of Ziegler alcohols, alumina, and Guerbet alcohols declined 22% compared to the equivalent period last year to 25,000 metric tons, it says.

Sales volumes in Sasol’s performance chemicals business fell 11% YOY due mainly to COVID-19 restrictions and the Hurricane Laura outage, it says. Due to the impact of the hurricane on its operations, Sasol has revised its market guidance lower and is now estimating its performance chemicals total sales volumes for the financial year 2021 will be “in line” with the prior financial year.

Earlier this month Sasol agreed to enter into a joint venture with LyondellBasell for its LCCP base chemicals business, including its west ethane cracker, linear low-density polyethylene (LLDPE) and LDPE plants. Sasol will retain full ownership and operational control of the Lake Charles east plant ethane cracker and eight performance chemicals business assets at Lake Charles, as well as its US phenolics business, and HDPE JV with Ineos at LaPorte, TX.

As MRC wrote previously, Sasol's world-scale US ethane cracker with the capacity of 1.5 mln tonnes per year reached beneficial operation on 27 August 2019. Sasol's new cracker, the heart of Lake Charles Chemicals Project (LCCP), is the third and most significant of the seven LCCP facilities to come online and will provide feedstock to the company's six new derivative units at its Lake Charles multi-asset site.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Sasol is an international integrated chemicals and energy company that leverages technologies and the expertise of our 31 270 people working in 32 countries. The company develops and commercialises technologies, and builds and operates world-scale facilities to produce a range of high-value product stream, including liquid fuels, petrochemicals and low-carbon electricity.
Author:Margaret Volkova
Tags:PP, PE, LLDPE, crude and gaz condensate, PP random copolymer, propylene, LDPE, HDPE, ethylene, petrochemistry, Sasol, Russia, USA.
Category:General News
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