​Sasol's giant U.S. petrochemical plant delayed as cost jumps again

This image of construction underway at the Lake Charles petrochemicals plant was posted to Twitter by Sasol in May 2018.

Sasol Ltd. said capital costs at its Lake Charles chemicals project in Louisiana have increased once again, to as much as $11.8 billion, and the startup will be delayed by as many as five months.

The previous cost estimate for the project, which will convert ethane into plastics and other products, was about $11.1 billion. Sasol cited “several factors within and beyond our control” for the revision.

Lake Charles is Sasol’s largest project and will transform the South African company’s production mix once up and running. Yet it’s faced repeated setbacks, including a 25 percent cost hike in 2016 to $11 billion -- a price tag the then-chief executive officer called a “ worst-case scenario.”

Friday’s announcement will disappoint investors after the company said as recently as October that project costs were within market guidance.

Sasol shares sank as much as 5.7 percent on Friday and traded down 5.4 percent at 389.4 rand as of 10:13 a.m. in Johannesburg. It was the worst performer on the FTSE/JSE Africa All Share Index.

© 2019 Bloomberg L.P

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