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Sasol increases cost of Lake Charles petchems facility; cracker online in late 2018

HOUSTON, August 23, 2016 (PCW) -- Sasol on Tuesday said that the cost of building its new Lake Charles petrochemical facility would be increased by $2.1 billion to $11 billion.

The LLDPE plant would come online first in the second half of 2018, followed by the 1.5 million mt/yr (3.3 billion lbs/yr) ethane cracker and ethylene oxide/monoethylene glycol units. The LDPE unit would go into service shortly after that. Sasol expects more than 80% of the total output from the facility will be achieved by early 2019. The remaining derivatives units are expected to be up and running by 2H 2019.

Sasol said the increased costs were due to “much more ground works required to establish the site compared to what was estimated at FID as a result of poorer than anticipated subsurface conditions, 50% more weather day delays over the site construction period compared to the average norm, and much lower field productivity resulting from a conscious decision to proceed with out-of-sequence site preparation activities while waiting for a variation of permit conditions to be granted.”

The higher cost estimate was also due to an increase in contractor wage rates compared to what was originally assumed, more contractor engineering hours, higher labor costs and the decision to change to higher-skilled, higher-cost crew mix. -- Samantha Hartke

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