Officials: Sasol expansion to create 7,000 direct and indirect jobs

WESTLAKE, LA (KPLC) - Westlake's Sasol is eyeing a multi-billion dollar expansion that will create thousands of jobs, officials said Monday.

Details of the project were announced Monday at a briefing at the company. Officials said it is the largest manufacturing investment in Louisiana history.

It's being called the beginning of a new era of prosperity. One of the area's economic chiefs likens its significance to the arrival of the petrochemical industry on the Calcasieu Ship Channel during World War II.

And officials say it's one of the largest foreign investments in manufacturing in U.S. history.

"Sasol's now planning a $16-to-$21-billion integrated gas to liquids and ethane cracker complex, right here in Calcasieu Parish," said Gov. Bobby Jindal, who was at the briefing.

It became official on Friday when Sasol's board of directors in South Africa voted to move forward in Westlake in Calcasieu Parish. Jindal and Sasol's CEO David Constable were joined by government and business leaders from throughout the area for the mega announcement.

"Seven thousand permanent jobs, 1,250 of those direct jobs, pays an average salary of $88,000 even before benefits," Jindal said. "This project may indeed be, if not the largest, and it may be the largest, it's at least one of the largest ever foreign direct investment manufacturing projects in the history of our entire country. We think it may be the biggest one in the entire country. We can't find one that's bigger."

Constable said the integrated gas-to-liquids and ethane cracker complex will provide the U.S. with world class, cleaner burning fuel and improve the country's energy security.

"The second mega project, or GTL facility, a first, a first for the U.S., will convert abundant, domestic natural gas, into four million tons per year of GTL diesel and other products in a cost efficient and environmentally responsible fashion. This second project will be a game changer for America's energy future, increase domestic energy production, combined with new energy technologies like GTL, will provide the U.S. with both energy security and a measure of energy independence," said Constable.

George Swift with the SWLA Economic Alliance said it was a day to remember.

"Probably not since the Ship Channel was dug in the late 1920s or we began the petrochemical industry here in World War II has today been any bigger in Southwest Louisiana. So, this is a historic day. Mark it down as a new beginning for Southwest Louisiana," said Swift.

Also, the governor said the state will provide $20 million dollars for a new training center on Industrial Technology at Sowela Technical Community College. He said it will first meet Sasol's huge workforce needs and then others in the future.

As far as the timetable,  officials said the significant construction should get underway in 2014.

The country's first gas to liquid project starts with an engineering and design phase to be complete by 2014. The ethane cracker is expected to be up and running in 2017; the gas to liquids facility in 2018.

Down the road, there will be a website for those interested in employment or doing business with Sasol.

Constable said the expansion is expected to create 1,253 direct jobs paying an average salary, at full employment, of nearly $88,000, plus benefits, and resulting in an additional 5,886 new, indirect jobs, for a total of more than 7,000 direct and indirect jobs. Sasol also will retain 435 existing direct jobs in Westlake as a result of the project.

The project will reportedly take several years to complete. Officials said it will consist of an integrated, 96,000 barrels-per-day (bb/d) GTL facility representing a capital investment of between $11 billion and $14 billion, as well as an ethane cracker representing a capital investment of $5 billion to $7 billion.

Officials said that the GTL project will be delivered in a phased approach, with phase one delivering the first 48,000 bb/d and phase two delivering the remaining production capacity. The ethane cracker will produce 1.5 million tons per annum of ethylene, one of the chemical industry's key buildings blocks for alcohol- and plastics-based products, including solvents, surfactants and polymers.

Officials said including direct and indirect effects, the Sasol project will produce a total economic impact over the next 20 years of $46.2 billion, according to an economic impact study commissioned by LED and completed by the LSU Division of Economic Development.

Sasol is an international integrated energy and chemicals company that leverages the talent and expertise of more than 34 000 people working in 38 countries, according to the company's web site.

Copyright 2012 KPLC. All rights reserved.

The following is a Monday news release from Sasol about the company's plans:

Sasol commences the front-end engineering and design (FEED) phase for an integrated gas-to-liquids and ethane cracker complex

Lake Charles, Louisiana, (USA) – South African-based energy and chemicals company, Sasol, today announced it will proceed with front-end engineering and design (FEED) phase for an integrated, 96 000bbl/d gas-to-liquids (GTL) facility and a world-scale ethane cracker with downstream derivatives, at its Lake Charles site in southwest Louisiana.

At a media conference today with Louisiana Governor, Bobby Jindal, Sasol's chief executive officer, David Constable, said there is significant opportunity to beneficiate the abundant gas reserves in the United States by leveraging Sasol's GTL experience and technology. Sasol's commercially proven GTL process diversifies the use of natural gas through the production of premium quality liquid fuels and chemicals.

"Sasol is proud to be driving forward with the next phase of the strategic mega-projects that we have announced today. Through our innovative energy and chemicals technologies, we will provide the United States with world-class, cleaner-burning fuel, contribute to the country's energy security, boost downstream manufacturing capacity, and diversify the utilization of domestic gas resources", Constable said.

"Sasol envisions a game-changing partnership with the State that could yield significant benefits not only for our company but for the community and for the country. By incorporating GTL technology into the USA's energy mix, states such as Louisiana will be able to advance the country's energy independence, through a diversification of supply. We greatly appreciate the support we have received from the State of Louisiana and Governor Jindal, along with the people of Calcasieu Parish, in reaching these significant project milestones. We look forward to furthering our interests in the region, and continuing our engagement with all our stakeholders."

Governor Jindal said, "Today is a great day for Westlake, Calcasieu Parish and our entire state. Today's announcement is not only one of the most exciting announcements in the history of Southwest Louisiana, but one of the most significant economic development wins our state – and our nation – has ever recorded. Sasol is one of many energy companies that is expanding in Louisiana because of our world class energy infrastructure, strong business climate, and incomparable workforce.

"Never before in our nation's history has there been a greater call for energy independence, but that independence will only result from a meaningful application of innovative and practical solutions for new sources of energy. This project is a giant step forward to help our country become more energy independent and less reliant on foreign sources of energy.

"This project will be the largest single manufacturing investment in the history of Louisiana and it also represents one of the largest foreign direct investment manufacturing projects in the history of the entire United States. Despite a national economic downturn, this historic economic development win is happening in Louisiana because we have been laser focused on job creation by creating an environment where businesses want to invest and create jobs for our people."

The GTL facility, the first of its kind in the U.S, will produce four million tons per annum (mtpa), or 96 000bbl/d of high quality transportation fuel, including GTL diesel and other value-adding chemical products.

Current project costs for the GTL facility are estimated between US$11 billion and US$14 billion. The GTL project will be delivered in two phases, with each phase comprising 48 000 bbl/d. The first phase is planned to come into operation in the 2018 calendar year and the second phase the following calendar year.

The world-scale ethane cracker will allow Sasol to expand its differentiated ethylene derivatives business in the U.S. The cracker will also benefit from the current low U.S. natural gas prices and the abundance of ethane.

Current cracker project costs are estimated between US$5 billion and US$7 billion. Sasol expects beneficial operation to be achieved during the 2017 calendar year. It will produce an estimated 1,5 mtpa of ethylene with downstream derivative plants. Sasol also has a differentiated portfolio of ethylene-based technologies that will enable it to meet growing demand for high value-add chemicals.

The integrated GTL and ethane cracker projects will, together, create a minimum of 1200 permanent positions, 7 000 construction jobs at peak and thousands of indirect jobs both in Louisiana and in the rest of the U.S.

The complex will benefit from a competitive incentive package, formalized in a Cooperative Endeavor Agreement with the state of Louisiana, supported by Governor Jindal. 

Sasol today also announced it will adopt a phased approach to the next stage of its planned GTL facility, in western Canada. The feasibility study was successfully completed in 2012 and the required regulatory application and land procurement processes are underway. However, in accordance with the need to prioritize Sasol's growth portfolio, this investment opportunity will be phased after the integrated Lake

Charles GTL and cracker projects. A decision to proceed with FEED will be considered at a later stage.