SASOL:SSL--EEE PARTNER ON THE MOVE:
Sasol Moving on Global CTL Project Studies from China to U.S.
JOHANNESBURG--March 13, 2008--Researched by Industrial Info Resources (Sugar Land, Texas)--South Africa's proposed coal-to-liquid (CTL) project Mafutha, which means "oil" in Zulu, is now at the prefeasibility stage. The 80,000-barrel-per-day (BBL/d) Sasol Limited Group (NYSE: SSL) (Johannesburg, South Africa) project will be at a location with adequate coal-feed resources. The project could be sited in the northern Waterberg region, adjacent to Botswana, or in Free State Province in central South Africa. An inland site is preferred, as South Africa's economic activity has its heaviest concentration in Gauteng Province. Sasol is already producing 150,000 BBL/d of CTL at Secunda and proposes to increase production there by 20% by 2014. Sasol envisions ongoing modular increases to CTL production, as the country could face fuel shortages in the next two years if the already high import rate of refined fuels is not increased, putting further pressure on the balance of payments.
Leon Strauss, General Manager of Sasol International Energy, said the company is engaged in the second phase of a $45 million bankable feasibility study to be completed in 2009 on two CTL plants in China where the company is looking for 50/50 participation in the projects. He said that the two 84,000 BBL/d plants in Shaanxi and Ningxia Hui are unlikely to go into production before 2016. Bidders for the construction of the projects will be decided in May.
Strauss said the projects will not proceed until intellectual property (IP) rights were secured in China where commercial opportunities offer returns large enough to balance the risk of taking the company's IP to that country. He said Sasol was also conducting pre-feasibility studies in India and the U.S. on CTL projects.
Sasol CEO Pat Davies said the company is commissioning new production capacity at the Arya polymer plant in Iran and at the Oryx gas-to-liquid (GTL) fuel plant in Qatar. In the first six months of operation, Oryx averaged 9,000 BBL/d of ultra-low-sulfur diesel and naphtha. This output moved up to 16,000 BBL/d in December 2007. Arya will achieve sustainable ethylene production by the end of March.
At the Escravos GTL plant in Nigeria, Davies said that there had been a material increase in expected capital costs. Contract terms have been modified from a fixed sum to reimbursable basis and that the impact is being evaluated. A material increase in capital costs is expected, he said.
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