Sasol will link with Mozambique gas bonanza.
ENERGY group Sasol is entering “a new era” as it focuses on opportunities in natural gas in South Africa and North America.
Sasol‚ one of SA’s biggest industrial groups‚ was founded on coal-to-liquids (CTL) technology. Its Secunda plant‚ the biggest contributor to operating profit‚ uses coal to produce synthetic fuels and chemicals.
CEO David Constable said on Monday Sasol would remain a CTL company for decades and could look at building CTL plants elsewhere in the world. Opportunities in natural gas arose because of the CTL technology and the vast natural gas finds in Mozambique.
Vestact Asset Management analyst Sasha Naryshkine said the group’s South African synfuels operation was still the core of the business‚ but planned investments in Louisiana‚ in the US‚ would de-risk the group geographically and be “a game changer”.
Sasol said last year it was studying two major projects in the Lake Charles region of Louisiana: an ethane cracker plant with an estimated cost of about $7-billion (R76-million)‚ and two adjacent gas-to-liquids (GTL) plants and chemicals facilities‚ costing up to $14-billion (R153-billion) in total.
Constable said the Louisiana chemicals project was on track for a final investment decision before the end of this calendar year.
Discussions were under way on securing financing‚ and an investment decision on the GTL plants would follow 24 months after a decision on the ethane cracker.
Sasol is also undertaking a feasibility study in partnership with Empresa Nacional de Hidrocarbonetos‚ Mozambique’s state oil company‚ and Italian multinational Eni, on building a large GTL plant in northern Mozambique to use gas from the Rovuma basin.
Sasol spent R40-billion on capital projects in the year to June‚ of which 57% was in SA. Over the following two years‚ it planned to spend R115-billion‚ including on the Louisiana project but excluding the Mozambican GTL plant‚ on which it was still updating cost estimates‚ acting chief financial officer Paul Victor said.
The company said on Monday it had achieved a decade-high 7.6-million tonnes of synfuels production and a 14% increase in headline earnings per share to R60.16 in the year to June 30.
Constable said that in Sasol’s “new era‚ our focus will be on becoming a leading monetiser of natural resources‚ and a trusted partner to countries seeking to add value to their hydrocarbon reserves”. He said a priority for Sasol’s expansion ambitions in Africa was Mozambique. Other countries that were attractive – and where the company did not already operate – were “Angola‚ Ghana onshore‚ and Tanzania; those types of countries we will take a run”. Sasol would consider assets already in production‚ or investing in existing blocs as a non-operator‚ or taking part in oil and gas exploration in these countries.
Investec Securities said its initial impression of the results was positive. However‚ of concern was the 10.6% increase in costs in the synfuels division.
Victor said the group’s 7% increase in operating profit to R41.7-billion was driven by operational improvements and a weaker rand‚ which averaged R10.39/$ in the year to June compared with R8.85/$ last year.
As flagged by JPMorgan analysts‚ Constable announced that the target for sustainable cost savings from the group’s business improvement programme had been raised to at least R4-billion a year from 2016‚ from a previous target of R3-billion.
Sasol had spent R1.3-billion implementing the programme and would spend R2.1-billion in the current year‚ Constable said.
Naryshkine said that during 15 years of rising oil prices‚ there had not been the same need for Sasol to cut costs that there was now that oil prices were at their least volatile in four decades.
Synthetic fuel giant eyes new era
ENERGY group Sasol is entering “a new era” as it focuses on opportunities in natural gas in South Africa and North America.
Sasol‚ one of SA’s biggest industrial groups‚ was founded on coal-to-liquids (CTL) technology. Its Secunda plant‚ the biggest contributor to operating profit‚ uses coal to produce synthetic fuels and chemicals.
CEO David Constable said on Monday Sasol would remain a CTL company for decades and could look at building CTL plants elsewhere in the world. Opportunities in natural gas arose because of the CTL technology and the vast natural gas finds in Mozambique.
Vestact Asset Management analyst Sasha Naryshkine said the group’s South African synfuels operation was still the core of the business‚ but planned investments in Louisiana‚ in the US‚ would de-risk the group geographically and be “a game changer”.
Sasol said last year it was studying two major projects in the Lake Charles region of Louisiana: an ethane cracker plant with an estimated cost of about $7-billion (R76-million)‚ and two adjacent gas-to-liquids (GTL) plants and chemicals facilities‚ costing up to $14-billion (R153-billion) in total.
Constable said the Louisiana chemicals project was on track for a final investment decision before the end of this calendar year.
Discussions were under way on securing financing‚ and an investment decision on the GTL plants would follow 24 months after a decision on the ethane cracker.
Sasol is also undertaking a feasibility study in partnership with Empresa Nacional de Hidrocarbonetos‚ Mozambique’s state oil company‚ and Italian multinational Eni, on building a large GTL plant in northern Mozambique to use gas from the Rovuma basin.
Sasol spent R40-billion on capital projects in the year to June‚ of which 57% was in SA. Over the following two years‚ it planned to spend R115-billion‚ including on the Louisiana project but excluding the Mozambican GTL plant‚ on which it was still updating cost estimates‚ acting chief financial officer Paul Victor said.
The company said on Monday it had achieved a decade-high 7.6-million tonnes of synfuels production and a 14% increase in headline earnings per share to R60.16 in the year to June 30.
Constable said that in Sasol’s “new era‚ our focus will be on becoming a leading monetiser of natural resources‚ and a trusted partner to countries seeking to add value to their hydrocarbon reserves”. He said a priority for Sasol’s expansion ambitions in Africa was Mozambique. Other countries that were attractive – and where the company did not already operate – were “Angola‚ Ghana onshore‚ and Tanzania; those types of countries we will take a run”. Sasol would consider assets already in production‚ or investing in existing blocs as a non-operator‚ or taking part in oil and gas exploration in these countries.
Investec Securities said its initial impression of the results was positive. However‚ of concern was the 10.6% increase in costs in the synfuels division.
Victor said the group’s 7% increase in operating profit to R41.7-billion was driven by operational improvements and a weaker rand‚ which averaged R10.39/$ in the year to June compared with R8.85/$ last year.
As flagged by JPMorgan analysts‚ Constable announced that the target for sustainable cost savings from the group’s business improvement programme had been raised to at least R4-billion a year from 2016‚ from a previous target of R3-billion.
Sasol had spent R1.3-billion implementing the programme and would spend R2.1-billion in the current year‚ Constable said.
Naryshkine said that during 15 years of rising oil prices‚ there had not been the same need for Sasol to cut costs that there was now that oil prices were at their least volatile in four decades.
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