Sasol’s intense focus on U.S. investment comes months after protracted negotiations and pressure to exit from the Iranian market as international sanctions over the country’s nuclear development program put a dark cloud on the company’s operations.
“We expect that [the] divestment from Iran will eliminate any questions regarding the impact of Iranian sanctions programs on Sasol. We view this step as a positive development for Sasol’s growth strategy in the U.S. and elsewhere,” says Alex.
Earlier, Sasol CEO David Constable had said the strategy to grow the petrochemicals business “will take full advantage of the natural-gas opportunities along the U.S. Gulf Coast, and the anticipated growth will strengthen Sasol's overall portfolio."
The U.S. market is “an attractive investment opportunity for us, and Sasol is well-positioned to convert this natural-gas resource into high-value products using our proprietary technologies,” he said.
Constable said the two projects make up the largest foreign, direct investment in Louisiana, set to create 1,200 permanent jobs and at least 7,000 construction jobs.
Several service contractors have been picked for the basic engineering for the world-scale ethane project, among them Technip (ethane cracker), Toyo Engineering Corp. (linear low-density polyethylene), Mitsui Engineering & Shipping Co. (low-density polyethylene) and Samsung Engineering America Inc. (ethylene oxide and mono-ethylene glycol).
“The ethane cracker will allow expanding our differentiated ethylene derivatives business in the U.S.,” said Alex.
Earlier, Louisiana Economic Development Director Stephen Moret had confirmed that Sasol, like any manufacturer in Louisiana, “has access to a 100% industrial property tax exemption for the first 10 years of a new capital investment.”
Although Moret could not confirm whether Sasol’s industrial property tax exemption amounts to $1 billion as local media reports had indicated, he said, “Because Sasol is a huge project, the value of statutorily exempted local property taxes is quite large.”
In September, South African media quoted André de Ruyter, Sasol’s head of global chemicals and North American operations, as saying that the overall state incentives package was in excess of $1 billion over the life of the project but is tied to “Sasol meeting all of its investment commitments.”