Sasol, Westlake Move On Projects

Encouraged by low-cost petrochemical feedstocks from shale gas, two petrochemical makers—Sasol and Westlake Chemical—are advancing on plans to build more capacity in Lake Charles, La.

Sasol, the South African fuels and petrochemical giant, has given the final go-ahead for its project to build an $8.1 billion ethylene cracker and derivatives complex.

The ethylene plant will have 1.5 million metric tons of annual capacity when it opens in 2018. The company hasn’t said what its final slate of derivatives units will be, but it has previously said it is planning polyethylene, ethylene oxide, synthetic alcohols, 1-octene, and ethoxylation facilities.

When the cracker project was originally unveiled back in 2011, Sasol estimated that the cost would be $3.5 billion to $4.5 billion. When it updated the project in December 2012, the company said the program would cost between $5 billion and $7 billion. In addition, the company will spend $800 million on land acquisition and infrastructure improvements at its Louisiana site.

“In spite of a largely volatile macroeconomic outlook, we are confident that we will deliver this project successfully,” says David E. Constable, Sasol’s president and chief executive officer.

Separately, Westlake Chemical will invest more than $330 million to boost ethylene capacity at its Lake Charles complex by 100,000 metric ton per year. The company plans to complete the incremental expansion by early 2016.

The expansion comes in addition to a capacity expansion of similar size that the company completed at its Lake Charles site in 2013.