Sasol's $11bn chemical project restarts after Harvey | Fin24

Sasol's $11bn chemical project restarts after Harvey

Sep 07 2017 06:44
Paul Burkhardt, Bloomberg News

Johannesburg - Sasol said workers began returning to its $11bn Lake Charles Chemicals Project in Louisiana in the US after the site was shut for more than a week because of Hurricane Harvey.

Construction workers came back “albeit at lower-than-usual turnout levels” following the August 26 closure Russell Johnson, a spokesman for Sasol’s North American operations, said in an email late Tuesday.

“The site could not be accessed for safe work for seven work days,” he said.

Sasol last year raised the projected cost of Lake Charles by 25% to $11bn, citing problems including weather delays at a site with “poorer-than-anticipated subsurface conditions.” The company has also lowered estimated returns from the plant, which will convert ethane into plastics and other products. Harvey, which made landfall near Corpus Christi, Texas, shuttered the region’s petrochemical operations.

Central to the weather delays cited by the company was a 50% increase in rainy days from the 10-year average, according to an investor fact sheet from August last year. Rainfall from Harvey has set a record for the continental US, according to the National Weather Service.

Sasol shares closed at R385.99 in Johannesburg trading on Wednesday, taking its decline over the past month to 5.7%.

The company said it’s working with a venture of Fluor Corp and TechnipFMC plc, contracted by Sasol, “to assess further workforce and material supply impacts” to the Lake Charles project as a result of Hurricane Harvey.

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