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Sasol delays LDPE plant completion to H2 2020

Houston — South African petrochemical producer Sasol said Monday its LDPE unit is expected to be completed in the second half of 2020, delayed from its previous plan to start up the cracker and LDPE plant by the end of 2019.

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In January, an explosion and fire damaged part of Sasol's 420,000 mt/year LDPE plant as it was coming online, S&P Global Platts reported earlier. The unit was shut at the time.

The cracker and LDPE plant are part of the new Lake Charles Chemical Project, or LCCP, and among one of the 13 new LDPE plants that emerged through 2017 to 2019.

Sasol's LCCP is 99% completed and operating with 80% production capacity in use, the company said in their interim financial results on Monday.

The company projected the LCCP would cost $8.9 billion in 2014, but now is expected to cost an additional 43.8% at an estimated $12.8 billion due to technical complications.

Sasol saw a 73% drop in earnings per share during the second half of 2019 amid delays with the project.

"The financial results were impacted mostly by a weak macroeconomic environment, which resulted in lower margins, and the LCCP being in a ramp-up phase," Sasol said.

The LLCP's linear low-density polyethylene, ethylene oxide and ethylene glycol units are producing at targeted levels, while the ETO unit achieved "beneficial operation" at the end of January, the company said.