After several years of construction and weathering two hurricanes, South Africa-based energy and chemical company Sasol Ltd. has completed its $12.8 billion petrochemical complex in Lake Charles.
Sasol Ltd. built the sprawling complex in stages and has seven different units at the site, the last of which was its low density polyethylene unit, known as LDPE.
The unit achieved "beneficial" operations on Nov. 15, about two months after initially projected as the region had two hurricanes make landfall this year.
It can produce up to 420,000 tons of polyethylene each year using technology developed by Exxon Mobil. The raw material is used in manufacturing plastic bags, shrink wrap and stretchy film, in addition to paper cup or carton coatings and squeezable plastic bottles.
Sasol sold a 50% stake for $2 billion in three of its seven plants to Houston-based LyondellBasell, which is expected to operate those three units on behalf of Sasol. That includes the linear low density polyethylene unit.
That enables Sasol to focus on specialty chemicals but still retain base chemicals in its portfolio.
Since the project began, Sasol hired more than 800 workers in Lake Charles and supported up to 6,500 construction jobs. It spent $4 billion with businesses in Louisiana over several years and spent $200 million on local and state taxes.
In exchange, the project used several state economic incentive tools including the Industrial Tax Exemption Program, which allows property tax abatement and Quality Jobs which offers up to a 6% rebate on payroll.
Sasol had initially pitched a natural gas-to-liquids plant in Lake Charles that was scrapped. Instead, $8.9 billion was allocated for its Lake Charles petrochemical complex in 2014 but the project became increasingly more expensive.
The company was on track to wrap up in September but Hurricane Laura moderately damaged the site in mid-August and then Hurricane Delta swept through in early October. Hurricane Laura had a 170,000 kiloton impact on net salable tons for the company's North American operations during the third quarter. In late October, the company expected its earnings at the Lake Charles site to be between $50 million and $120 million, which includes insurance claims related to Hurricane Laura damage. At the time, sales in volumes chemicals dropped by 11% during the three-month period through Sept. 30.
"We are proud of our legacy in southwest Louisiana and look forward to continuing to be a leader both in our industry and the communities where we operate over the long term," said Eric Stouder, senior vice president of Americas chemicals at Sasol.
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