ADVERTISEMENT
Sasol's Giant U.S. Plant Delayed as Cost Blows Out Again
Sasol's Lake Charles Plant Delayed, Cost Grows to $11.8 Billion
08 Feb 2019, 07:31 PM IST
(Bloomberg) -- Sasol Ltd. said capital costs at its Lake Charles chemicals project in Louisiana have increased once again, to as much as $11.8 billion, and the startup will be delayed by as many as five months.
(Bloomberg) -- Sasol Ltd. said capital costs at its Lake Charles chemicals project in Louisiana have increased once again, to as much as $11.8 billion, and the startup will be delayed by as many as five months.
- The previous cost estimate for the project, which will convert ethane into plastics and other products, was about $11.1 billion. Sasol cited “several factors within and beyond our control” for the revision.
Key Insights
- Lake Charles is Sasol’s largest project and will transform the South African company’s production mix once up and running. Yet it’s faced repeated setbacks, including a 25 percent cost hike in 2016 to $11 billion -- a price tag the then-chief executive officer called a “worst-case scenario.”
- Friday’s announcement will disappoint investors after the company said as recently as October that project costs were within market guidance.
Market Reaction
- Sasol shares sank as much as 5.7 percent on Friday and traded down 5.4 percent at 389.4 rand as of 10:13 a.m. in Johannesburg. It was the worst performer on the FTSE/JSE Africa All Share Index.
Get More
- Sasol also released a trading update on Friday, saying headline earnings, which exclude one-time items, probably rose as much as 34 percent in the six months through December from a year earlier.
- See key figures from Sasol’s trading statement here.
Related Stories
- Fuel Giant Sasol Is Transforming Into a Chemicals Powerhouse
- Sasol U.S. Project Gets Tax Reform Boost as Startup on Track
- South Africa’s Sasol Tightens Purse Strings for New Projects
To contact the reporter on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net
To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Amanda Jordan, Rakteem Katakey
©2019 Bloomberg L.P.
Get live Stock market updates, Business news, Today’s latest news, Trending stories, and Videos on NDTV Profit.
ADVERTISEMENT