Sasol confirms escalating costs

South African oil and chemicals maker Sasol has issued a final report confirming earlier findings, released last June, that the costs to build its Lake Charles Chemical Project in Louisiana have increased $2.1 billion versus previous estimates. The petrochemical complex, more than 50% complete and now expected to cost $11 billion, will feature an ethylene cracker, as well as polyethylene, ethylene oxide/ethylene glycol, and other chemical derivatives plants. The company reviewed some 60,000 line items related to the construction. The reasons behind the increase include additional groundwork needed because of poor sub-surface conditions, increases in construction costs because of higher wages, and larger-than-expected materials purchases. However, the company still expects to commission the facility beginning in 2018.