South African petrochemicals group Sasol announced this morning it has made the final investment decision on an $8.1 billion ethane cracker it plans to build in Lake Charles, Reuters reports.
A cracker converts ethane taken from natural gas into ethylene, the basic building block for the manufacture of plastics and chemicals. The ethane cracker will eventually produce 1.5 million tons of ethylene annually.
“Approximately 90 percent of the cracker’s ethylene output will be converted into a diverse slate of commodity and high-margin specialty chemicals for markets in which Sasol has a strong position,” Sasol says in a statement.
Sasol says it’s “well-advanced” in raising the funds for the project and will use “a variety of international U.S.-based dollar sources.” The facility will achieve beneficial operation in 2018, it says.
“Once commissioned, this world-scale petrochemicals complex will roughly triple our chemical production capacity in the U.S.,” Chief Executive Officer David Constable says in the statement.
Along with the plant investment, another $800 million will be invested in infrastructure and utility improvements around Lake Charles, the company says. The company has previously said it will follow the decision on the cracker with one on a gas-to-liquids plant about 18 to 24 months later.