Although Sasol’s manufacturing facilities in Lake Charles remained shut down on Monday, the aftermath of Hurricane Laura isn’t expected to hurt the company’s efforts at selling a stake in the complex.
In a statement issued Monday, Sasol noted that operations recovery crews at the Lake Charles site have started the damage assessment process. Although high wind speeds damaged the cooling towers at the Lake Charles Chemicals Complex, early reports indicate no apparent damage to process equipment and no flooding damage experienced as a result of storm surge. The company carries Atlantic Named Wind Storm (ANWS) insurance coverage for units under construction as well as operating units.
The storm did result in widespread electrical blackouts and other damage, preventing Sasol from operating most utility systems. High-voltage transmission line corridors into the Lake Charles area are damaged, and the full assessment is still in progress by a local power company. Start-up of the plants will depend on the availability of electricity, industrial gases, other feedstocks and the restoration process. Sasol said in its statement it is in conversation with customers and suppliers regularly regarding the impacts on production.
Sasol activated its inclement weather protocols ahead of the storm at all affected Gulf Coast locations in preparation for Hurricane Laura, shutting down facilities at Lake Charles as well as Greens Bayou and Winnie, Texas. The company is supporting its employees in the impacted areas, assisting with temporary housing, transportation and basic amenities for those affected by the storm.
Sasol will provide updates following its assessment, but noted it does not “envisage that the hurricane will have an adverse impact on any potential divestment transaction related to Sasol’s base chemical portfolio in the United States.”
According to media reports, Sasol has fielded offers from CP Chem, LyondellBasell and Ineos for a large stake in its Lake Charles petrochemical complex. It became clear in May the company was on the hunt for a buyer to secure a large stake in its $13 billion chemical complex in Lake Charles, with a goal of reaching a deal by June.
At the time, Sasol had hired Bank of America Corp. to help find a buyer for a minority stake in the troubled Lake Charles chemical project. Sasol previously indicated it was considering a partial sale of its U.S. base-chemicals business to avoid a last-resort rights issue in a deal that could generate $1.68 billion for the South African company.
Sasol’s Lake Charles Chemicals Complex has 14 manufacturing facilities. Sasol’s existing operational footprint at this site consists of a 455 ktpa cracker and several other petrochemical units. The seven new facilities, also known as the Lake Charles Chemicals Project facilities, include a world-scale 1.5 million ton per year ethane cracker, and six downstream chemical production facilities, two large polymers plants (low-density and linear low-density polyethylene) and an ethylene oxide/ethylene glycol plant, which together will consume around two thirds of the ethylene produced by the cracker; and three smaller, higher-value derivative plants, which will produce specialty alcohols, ethoxylates and alumina products.