South African energy giant Sasol said its Lake Charles chemicals complex is 50 percent complete, and the company remains confident that the project's "fundamental drivers" remain sound.
The project includes a world-scale ethane cracker, which will produce 1.6 million tons of ethylene a year, and six chemical plants making derivatives used in synthetic fibers, detergents, fragrances, paints, film and packaging. Earlier this year, Sasol reported the complex's projected cost had jumped from $8.9 billion to $11 billion.
The Lake Charles project update was part of Sasol's fiscal year report, released Monday. The company said its fiscal-year earnings dropped 55 percent to $914.4 million, largely as a result of slumping oil prices. The company's fiscal year ended June 30.
Sasol said it has "significantly sharpened" its focus on cost and schedule delivery following the increase in the chemical complex's cost. The company expects the ethane cracker will begin operating in the second half of 2018, with the entire complex up and running in the second half of 2019.
Sasol’s planned Lake Charles chemical complex could cost up to $11 billion, $2 billion more …
"Our cost reduction and cash savings initiatives are exceeding their targets, which places us on a sound footing as we gear up our balance sheet to complete the world-scale, company-changing investment in Louisiana in the U.S.," said Bongani Nqwababa, joint president and CEO of Sasol Ltd.
Sasol cut costs by $1.9 billion for the year, 75 percent more than projected.