Thursday, September 19, 2013

Financing Update on Sasol GTL Plant

One of the big "wins" for the regional chemicals and manufacturing economy was the announcement that South African company Sasol will build a gas-to-liquids plant near Lake Charles, LA to use shale gas to create a range of products, including diesel fuel.

This is an exciting project, but a recent Bloomberg piece reminds us that it still has a ways to go.  The state of Louisiana put $257 million of controversial incentives behind the project, but that is a small amount relative to the all-in costs of the project.  The ambitious project will cost about $21 billion, and Sasol is still in the process of raising the first $5 to 7 billion for the ethylene cracker.  Everything around the project seems positive, but the final decision whether or not to go forward is still not made and is not expected until 2014.  It's important to remember that we still have eggs, not chickens.

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