Price tag on Sasol’s Lake Charles complex soars by $2 billion _lowres

 

Sasol’s planned Lake Charles chemical complex could cost up to $11 billion, $2 billion more than originally estimated.

In March, the company launched a detailed review of the project: a world-scale ethane cracker producing 1.6 million tons of ethylene a year and six chemical plants making derivatives used in synthetic fibers, detergents, fragrances, paints, film and packaging.

A preliminary finding from the review shows the total spending on the project could escalate to $11 billion, partly because of construction delays caused by heavy rains, higher labor costs and some higher-than-expected bid contracts.

Sasol has already invested $4.5 billion in the ethane cracker and complex, which is more than 40 percent complete. Sasol slowed spending on the project in response to low oil prices, and the extended schedule also increased the project’s cost.

Sasol said it expects the ethane cracker will begin operating in the second half of 2018. The entire chemical complex will be in operation by the second half of 2019.