SULPHUR DAILY NEWS: Sasol selects Calcasieu Parish as location for potential multi-billion dollar complex
09.15.11 | NEWS CLIPPING
Westlake, La. —
On Tuesday, Gov. Bobby Jindal and Sasol New Business Development Managing Director Ernst Oberholster announced that the South African company has selected Calcasieu Parish as the location for a potential gas-to-liquids (GTL) complex.
The facility would entail a capital investment of approximately $8 to 10 billion and produce direct employment of approximately 850 jobs with average salaries of about $89,000, not including benefits. The project is slated to be the first plant in the U.S. to produce GTL transportation fuels and other products.
“We believe Sasol’s proprietary GTL technology can help unlock the potential of Louisiana’s clean and abundant natural gas resources and contribute to an affordable, reliable and high quality fuel supply for the United States,” said Oberholster.
“GTL fuels are an important part of the energy mix because they can advance energy independence in a way that is both cost-efficient and environmentally friendly,” he continued.
In addition, unlike other proposed alternatives to conventional petroleum-based fuels, GTL fuel is used in existing vehicles and fuel delivery infrastructure without modifications.
LED estimates that the project also would result in approximately 4,000 indirect jobs, which means the total impact of the project would be nearly 5,000 new jobs in Southwest Louisiana. Additionally, at full production capacity, the facility would consume approximately 305 billion standard cubic feet of natural gas per year; which would represent roughly $1.3 to 1.5 billion per year in natural gas purchases at current prices, and accordingly, Sasol’s proposed GTL complex would provide a huge new source of demand for the Haynesville Shale and other natural gas plays in Louisiana.
Governor Jindal spoke on the project.
“Sasol has selected Calcasieu Parish as their preferred location in the U.S. for one of the largest industrial projects in Louisiana history. This is great news for Southwest Louisiana and our entire state. Not only would this project result in nearly 5,000 new jobs, but it also would represent a huge new source of demand for natural gas in Louisiana, which would benefit the Haynesville Shale and other natural gas plays here. For nearly four years, we have made economic development our top priority so that we could put Louisiana in a position to secure projects like this one that would provide 850 jobs with salaries averaging $89,000, plus benefits. Without question, the Haynesville Shale and other unconventional natural gas plays are transforming the energy economy in the U.S., and we are positioning Louisiana to be one of the chief beneficiaries of that transformation.”
Sasol’s GTL complex would be the first of its kind built in the United States with Sasol converting natural gas into synthetic gas and then converting the synthetic gas into premium diesel fuel and related products. Sasol Ltd., based in Johannesburg, has been an innovator in coal-to-liquids and gas-to-liquids refining methods since the 1950s. Its Sasol North American Inc. subsidiary currently operates the 400-employee Sasol Lake Charles Chemical Complex in Westlake, with that facility located next to the city’s ConocoPhillips petroleum refinery.
LSU recently completed an economic impact analysis – commissioned by Sasol – that shows just how significant this project would be for the State of Louisiana and for the Calcasieu Parish area. The study says that construction alone will generate another $1.73 billion in additional business activity and more than 12,000 new jobs associated with $577 million in personal earnings during the five-year construction period. Once the Sasol GTL complex is fully operational, it would lead to additional economic activity in the state of almost $919 million a year.
Sasol considered several other states before selecting Louisiana as its preferred location in the U.S. The company could develop both a U.S. facility in Calcasieu Parish as well as a second facility in Canada, which also is under evaluation. Sasol plans for a design-and-engineering phase for the proposed Calcasieu Parish facility to begin soon, following the company’s completion of an extensive feasibility study estimated to cost in the tens of millions. If all proceeds as planned, construction is expected to start in 2013, and the complex would be built in two phases that upon completion in 2018 would process approximately 4.0 million tons of products per year, with a maximum capacity of 96,000 barrels-per-day. According to Sasol, the project would create thousands of construction jobs at an average salary of $75,000.
The new facility will utilize Sasol’s innovative GTL technology to convert abundant, domestic natural gas into diesel and other products in a cost-efficient and environmentally safe way, the company said. As part of America’s energy mix, GTL would help the U.S. meet its growing transportation needs while advancing its energy independence.
“Two years ago, we identified a focused set of priority growth targets for Louisiana, including unconventional natural gas opportunities like GTL facilities,” said LED Secretary Stephen Moret. “Since that point in time, we have focused an increasing amount of our energy on cultivating relationships with the companies most likely to have the capacity and willingness to bring this type of technology to fruition in the U.S. We are thrilled that Sasol has selected Calcasieu Parish as its preferred U.S. location for this project. Supporting the retention and expansion of Louisiana’s existing businesses has been and will continue to be our top economic development priority.”
This is the second “first of a kind” announced by Sasol in the U.S. in less than a year. In December 2010, Sasol announced the world’s first Ethylene Tetramerization Unit, also to be built in Calcasieu Parish.