MOSCOW (MRC) -- Sasol Ltd. warned of a further delay at its giant US chemicals project, pushing back the startup of the final unit by a couple of months, reported Bloomberg.
The Lake Charles complex in Louisiana has been dogged by mismanagement and cost overruns, forcing the South African company to accelerate asset sales to reduce debt. The latest holdup follows a fire that damaged the site’s low-density polyethylene (LDPE) unit back in January.
“The unit is expected to achieve beneficial operation before the end of October,” rather than “before September” as previously planned, Sasol said Thursday. “Challenges were experienced in the completion of the restoration process, resulting in a slight delay.”
The company has piled on debt to develop the Lake Charles site, whose cost has risen sharply from early estimates to almost USD13 billion. Setbacks at the development, coupled with oil’s crash amid the coronavirus pandemic, have dragged Sasol’s shares down more than 50% this year. The stock slipped 1.5% on Thursday at 10:53 a.m. in Johannesburg.
Sasol expects a loss from the US project in 2020 after the spread of the virus wiped out fuel demand and sent oil prices tumbling. The company has had a total of 774 Covid-19 infections, mainly in South Africa, with two related deaths, it said in a statement. A continuous increase in cases “could potentially impact our operations in the near term,” it said.
As MRC reported earlier, Sasol's world-scale US ethane cracker with the capacity of 1.5 mln tonnes per year reached beneficial operation on 27 August 2019. SasolпїЅs new cracker, the heart of LCCP, is the third and most significant of the seven LCCP facilities to come online and will provide feedstock to our six new derivative units at the company"s Lake Charles multi-asset site.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
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.
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