Sasol Ltd. has been meeting with shareholders amid growing dissatisfaction with cost overruns at the $13 billion Lake Charles chemical project, Bloomberg reports.
The meetings began after Sasol upped the estimated cost of the project by $1 billion in May, having increased it only three months earlier. Last week, Sasol delayed its annual results, saying it hasn’t completed a review of the problems at the project. Minutes after the announcement that independent consultants found possible “control weaknesses” at its Lake Charles chemicals project, company shares dropped by 12%.
So far, the Lake Charles operation, which will have seven production units delivering various chemicals, including a plastics variant called polyethylene, has been trouble for Sasol. At current estimates, it will cost between $12.6 billion and $12.9 billion—almost double the original budgeted amount. Last week, Sasol also warned there was a technical challenge that interrupted production at one of the facilities already operating production units.
Problems with the facility, Bloomberg reports, have hampered Sasol’s plans to expand internationally and to increase chemicals manufacturing alongside its core fuel-production business.
“The chairman of the Sasol board of directors together with management has held meetings with a number of shareholders to hear their views, concerns and expectations,” the company said in an announcement Monday. “With regard to the specifics of the shareholder meetings, it would not be appropriate for Sasol to comment on behalf of our shareholders on their expectations.” Bloomberg has the full story.
