Opportunities emerge as natural gas prices fall
As new technologies expanded production of natural gas in the U.S., market rates for this resource fell to historically low levels. The abundance of low-cost natural gas and its components, including ethane, created attractive opportunities for Sasol’s continued growth and investment in the U.S. market.
Sasol – a global energy and chemicals company headquartered in South Africa – already had significant chemical manufacturing operations in Louisiana at the time market rates for natural gas began falling. The company identified the abundance of low-cost natural gas and ethane in the U.S. as an opportunity for expanding its chemicals production.
Sasol executives and engineers developed plans for a world-scale petrochemical complex that would roughly triple Sasol’s chemical production in the United States. To successfully pursue this investment, the company required several critical resources. The operation needed a solid petrochemicals infrastructure, access to interstates and highways, port facilities and several hundred acres to support such a large undertaking. The company also required a skilled and highly capable workforce and an investment-friendly business environment.
Sasol finds the right location in Louisiana
In early 2011, LED’s Business Expansion and Retention Group, or BERG, partnered with the Southwest Louisiana Economic Development Alliance and the Port of Lake Charles to identify potential sites for a new investment by Sasol in Southwest Louisiana.
In their search, LED officials and their partners gathered site data for the region. They leveraged that data with geographic information system, or GIS, mapping technology to complete site-suitability analyses of multiple properties in the region. They ultimately located a 650-acre site that would meet the proposed project’s needs. With help from the Port of Lake Charles in identifying the location and supporting the required infrastructure upgrades, LED saved the company at least six months of time developing the property.
In September 2011, Sasol officials announced a final feasibility study of the location for the company’s new petrochemical complex, which would include an ethane cracker.
Training facility targets Sasol needs
As the feasibility study took place over the next year, LED and its partners continued to collaborate with Sasol representatives. Together, they developed solutions to support the petrochemical complex.
To secure Sasol’s investment, the State of Louisiana offered the company a competitive incentive package that included the services of LED FastStart®, the nation’s No. 1 state workforce training program. In addition, the project qualified for Quality Jobs payroll incentives for up to 10 years and for the state’s Industrial Tax Exemption Program. To support the skilled workforce demand for Sasol and other regional firms, the state funded a $20 million advanced manufacturing center. The facility first would train Sasol job candidates at SOWELA Technical Community College in Lake Charles and then meet the broader needs of manufacturers throughout the region.
Sasol announces final investment for ethane cracker complex
After selecting Louisiana for a potential petrochemical complex in late 2012, Sasol made its final investment decision to build the $8.1 billion project in Louisiana in October 2014.
At the heart of the giant petrochemical complex is a world-scale ethane cracker that produces ethylene, a mainstay of the plastics business. The site includes six other plants that will convert 90 percent of the complex’s ethylene into chemicals used to make everyday products: detergents, lotions, cleaners, packaging, paints and adhesives.
Building began in late 2014, with construction employment peaking at 6,000 workers and with nearly nine in 10 workers being a Louisiana resident. The construction workforce for Sasol was hired by eight major Louisiana-based subcontractors. In 2016, the company revised its capital investment in the ethane cracker complex upward, from $8.1 billion to $11 billion. In preparation for production to begin in the second half of 2018, Sasol ramped up its permanent workforce from 450 to nearly 1,000 employees by the end of 2017. Thanks in part to the strategic location, Sasol will remain well-positioned to make additional investments at its Lake Charles area site in the future.
“Louisiana understands the challenges of modern business, particularly those encountered by the energy and chemical sectors. As a result of this understanding, LED has created an environment which attracts new business and provides the private sector with the opportunity to expand and flourish. The support we received from LED was a major factor in our decision to expand our operations here. Louisiana’s positive business climate, skilled workforce and robust energy infrastructure were also key to our ability to extend our deep roots in Southwest Louisiana.”
Joint Chief Executive Officer