Sasol CTL plant 15 months late

10 January, 2007 at 11:40 am | Posted in Companies | 2 Comments

Sasol’s $950 million (R7 billion) Oryx gas-to-liquids (GTL) plant in Qatar continues to suffer from delays, with the plant set to miss its deadline for producing its first commercial fuel by as much as 15 months.
Oryx is 51 percent owned by Qatar and 49 percent by Sasol. In September 2005, Sasol said the Oryx GTL plant would commission in the first quarter of 2006. In September, Sasol moved the date to the last quarter of 2006.

Sasol chief executive Pat Davies has attributed the delays to contractor problems, especially damages to a steam superheating plant during early commissioning. Yesterday, London-based Sasol Chevron spokesperson Malcolm Wells said the Oryx GTL plant was set to come on stream in the first quarter of this year.

Sasol Chevron is a 50:50 joint venture between Sasol and ChevronTexaco to market GTL fuel. At full production, the Oryx plant is expected to produce 34 000 barrels a day. In another development, Sasol has been hit by more delays in the sale of its olefins and surfactants division, which spans chemical businesses mainly in Europe and North America.

Sasol first planned to sell the division by last September. It then extended the deadline to the end of last year. Sasol now expects to sell the olefins and surfactants business by the end of June, subject to regulatory and other approvals.

Initially 45 entities had expressed an interest in the division, and by last September the field had been cut down to three. Sasol Olefins and Surfactants is the renamed German company, Condea, which Sasol bought in 2001 from RWE-Dea for e1.3 billion (R12 billion).

Analysts expected Sasol to sell the division for between R6 billion and R7 billion. In September, Sasol wrote down the division by R2.8 billion after tax. Sasol first identified the olefins and surfactants division for sale in August 2005.

“Sasol today confirmed that negotiations are continuing with potential buyers for this business,” spokesperson Johann van Rheede said in a statement without giving reasons for the delay. “The company has reiterated that the sale of olefins and surfactants is subject to fair value being obtained and that until the business is sold, Sasol remains committed to the strategic and operational goals of olefins and surfactants and will provide the support necessary to uphold its effectiveness and success,” Van Rheede added.

(Bloomberg)

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