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Something positive for a change 
Petrochemicals group Sasol is set to spend R45bn on capital investment projects over the next three years, with more than half of the amount being spent on local projects.
Sasol, one of the biggest capital investors in SA, said in its latest biannual newsletter to investors released yesterday that about 60%, or R27bn, of that capital would be spent in the local economy on a range of projects to expand capacity and maintain operations.
Under the three-year programme, Sasol will spend R14bn next year and the same amount in 2008, with the figure rising to R17bn in 2009. In the past financial year Sasol spent R13bn.
About 75% of the total is earmarked for projects in the strategic energy sector.
These include a commencement of production capacity expansion of 20% at Sasol Synfuels, upgrades at the Natref oil refinery, which would restore Natref’s capacity to its full design capacity of 108000 barrels a day, and expanding the Mozambique-Secunda pipeline to a capacity of 183-million gigajoules a year.
Apart from current projects under way, Sasol is assessing the viability of building a fourth coal-to-liquids plant in SA with a potential capacity of 80000 barrels a day. If these plans become a reality, spending would dwarf the group’s current outlay.
A project of this scope would see the group spend as much as R48bn over five years, investment house Merrill Lynch projected in a recent report.
While Sasol has had discussions with government on the possibility of a new coal-to-liquids plant, the envisaged project is now at a pre-feasibility stage.
This means Sasol is examining issues such as the availability of sufficient coal reserves, utility supply, fuel demand growth in southern Africa and possible plant locations.
“We believe there is a real opportunity to partner with government to meet the needs of the country’s growing liquid fuel requirements,” said Sasol CEO Pat Davies.
If the project gets the nod it would be the largest single capital investment in SA in decades.
A project of this scope would also be in line with government’s desire to diversify energy sources and holds huge promise for the country’s balance of payments.
According to Merrill Lynch’s report, the demand for fuel in SA increased 12,3% between 2001 and last year, while refining capacity over the same period grew only 6,2%.
The country could opt to import more oil to meet growing demand, but that would come at a cost.
A new coal-to-liquids facility was the most attractive option for SA as a whole, Merrill Lynch said.
With the country now spending about 15% of its total import bill on oil, increased domestic production could constitute a considerable saving in foreign exchange while going some way to temper SA’s dependence on foreign suppliers.
The prospects of Sasol injecting a further R48bn into the local economy is likely to be a factor treasury will take into consideration when it considers a mooted windfall tax on Sasol. A decision on the tax is expected next year.
In its update on offshore projects, Sasol said start-up had resumed at Oryx, its 34000-barrels- a-day plant in Qatar. The project was delayed by a failure in the supporting utility steam superheater, but that damage has been repaired.
The plant is on track to produce its first product by the end of this month.
Petrochemicals group Sasol is set to spend R45bn on capital investment projects over the next three years, with more than half of the amount being spent on local projects.
Sasol, one of the biggest capital investors in SA, said in its latest biannual newsletter to investors released yesterday that about 60%, or R27bn, of that capital would be spent in the local economy on a range of projects to expand capacity and maintain operations.
Under the three-year programme, Sasol will spend R14bn next year and the same amount in 2008, with the figure rising to R17bn in 2009. In the past financial year Sasol spent R13bn.
About 75% of the total is earmarked for projects in the strategic energy sector.
These include a commencement of production capacity expansion of 20% at Sasol Synfuels, upgrades at the Natref oil refinery, which would restore Natref’s capacity to its full design capacity of 108000 barrels a day, and expanding the Mozambique-Secunda pipeline to a capacity of 183-million gigajoules a year.
Apart from current projects under way, Sasol is assessing the viability of building a fourth coal-to-liquids plant in SA with a potential capacity of 80000 barrels a day. If these plans become a reality, spending would dwarf the group’s current outlay.
A project of this scope would see the group spend as much as R48bn over five years, investment house Merrill Lynch projected in a recent report.
While Sasol has had discussions with government on the possibility of a new coal-to-liquids plant, the envisaged project is now at a pre-feasibility stage.
This means Sasol is examining issues such as the availability of sufficient coal reserves, utility supply, fuel demand growth in southern Africa and possible plant locations.
“We believe there is a real opportunity to partner with government to meet the needs of the country’s growing liquid fuel requirements,” said Sasol CEO Pat Davies.
If the project gets the nod it would be the largest single capital investment in SA in decades.
A project of this scope would also be in line with government’s desire to diversify energy sources and holds huge promise for the country’s balance of payments.
According to Merrill Lynch’s report, the demand for fuel in SA increased 12,3% between 2001 and last year, while refining capacity over the same period grew only 6,2%.
The country could opt to import more oil to meet growing demand, but that would come at a cost.
A new coal-to-liquids facility was the most attractive option for SA as a whole, Merrill Lynch said.
With the country now spending about 15% of its total import bill on oil, increased domestic production could constitute a considerable saving in foreign exchange while going some way to temper SA’s dependence on foreign suppliers.
The prospects of Sasol injecting a further R48bn into the local economy is likely to be a factor treasury will take into consideration when it considers a mooted windfall tax on Sasol. A decision on the tax is expected next year.
In its update on offshore projects, Sasol said start-up had resumed at Oryx, its 34000-barrels- a-day plant in Qatar. The project was delayed by a failure in the supporting utility steam superheater, but that damage has been repaired.
The plant is on track to produce its first product by the end of this month.
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