Sasol plans R8.5bn capital expenditure in next six months

17-Mar-06

Synfuels and chemicals company Sasol expects to spend R8.5 billion on capital projects in the next six months, mostly in South Africa. Sasol plans to grow particularly its synfuels business by at least 20% in the next ten years. Sasol plans projects to expand gas-to-liquids activities in Qatar, coal-to-liquids in China, and is also exploring coal-to-liquids potential in India. Sasol's polymers project, Turbo, has gone behind schedule due to internal-rate-of-return reduction due to currency effects and delay in completion of projects due to understaffing and under-performance of engineering and construction contractors. As a result, operation of the polyethylene plant has been shifted to the third quarter and the polypropylene plant to the fourth quarter of this calendar year. The cost of the polymers plant had risen to $9,1-billion and the total cost of Project Turbo, including the fuels portion is 7% higher than the numbers last revealed. Overall, the cost was up 17% when the original cost estimate was compared to the current cost.