BusinessDay: Sasol sees a ‘new era’ ahead in natural gas

Energy group Sasol is entering "a new era" as it focuses on opportunities in natural gas in two main regions, South Africa and North America.

Sasol, one of South Africa’s biggest industrial groups, was founded on coal-to-liquids (CTL) technology.

Its Secunda plant, the biggest contributor to operating profit, uses coal to produce synthetic fuels and chemicals.

CEO David Constable said on Monday Sasol would remain a CTL company for decades and could look at building CTL plants elsewhere in the world. Opportunities in natural gas arose because of the CTL technology and the vast natural gas finds in Mozambique.

Vestact Asset Management analyst Sasha Naryshkine said the group’s South African synfuels operation was still the core of the business, but planned investments in Louisiana, in the US, would derisk the group geographically and be "a game changer".

Sasol said last year it was studying two major projects in the Lake Charles region of Louisiana: an ethane cracker plant with an estimated cost of about $7bn, and two adjacent gas-to-liquids (GTL) plants and chemicals facilities, costing up to $14bn in total.

Mr Constable said the Louisiana chemicals project was on track for a final investment decision before the end of this calendar year.

Discussions were under way on securing financing, and an investment decision on the GTL plants would follow 24 months after a decision on the ethane cracker.

Sasol is also undertaking a feasibility study in partnership with Empresa Nacional de Hidrocarbonetos, Mozambique’s state oil company, and Italian multinational Eni on building a large GTL plant in northern Mozambique to use gas from the Rovuma basin. MORE