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Sasol says new Louisiana cracker starting up

Houston — Sasol's new 1.5 million mt/year cracker in Lake Charles, Louisiana, is starting up, but the company's new associated 420,000 mt/year low density polyethylene plant is expected to come online four to six weeks later than planned, the company said.

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"We are experiencing some schedule pressure on the low density polyethylene (LDPE) plant and expect BO to be delayed by four to six weeks as it has taken longer than planned to complete the construction, as well as the cleaning and preparation of critical equipment," Sasol said in a statement Friday. The company had aimed to start up the LDPE plant next month.

Sasol defines beneficial operation as 72 consecutive hours of on-spec production.

The $12.6 billion-$12.8 billion project has experienced lengthy delays and cost increases. In February, the company announced that the cracker and derivative units would start up months later than planned because of incomplete engineering work, inclement weather and worker absenteeism, after the cracker and a 470,000 mt/year linear low density polyethylene (LLDPE) plant had been slated to start up by December 2018.

The LLDPE plant came online in February, followed by a 380,000 mt/year ethylene oxide/monoethylene glycol unit in June.

Sasol in in 2016 revised the project cost to $$11.1 billion from $9 billion because of issues with labor retention and other costs. Then in February pushed costs to $11.6 billion to $11.8 billion because of incomplete engineering work, bad weather and worker absenteeism. In May, overall costs climbed again to the current range, with a larger $300 million contingency. The company also is conducting an independent review of the project with independent technical and financial advisers, with a report expected to be submitted to Sasol's board of directors by late August.

Sasol's Lake Charles project is among more than $200 billion in new petrochemical infrastructure that is operational, under construction or planned in Texas, Louisiana, Pennsylvania and Ohio as a result of unprecedented access to cheap ethane unearthed amid the US natural gas shale boom.

Sasol's new polyethylene output is part of $13.67 million mt/year of new US capacity starting up from 2017-2028, all or most of which is targeted for export, largely to Asia, the top global demand market.

-- Kristen Hays, kristen.hays@spglobal.com

-- Edited by Richard Rubin, newsdesk@spglobal.com