Divestment of a 50% interest in Sasol’s Lake Charles Chemicals Project (LCCP) Base Chemicals Business and the creation of a joint venture with LyondellBasell.
In the March 2020 announcement Sasol set out its response plan, which included decisive action to reduce Sasol’s debt and an intention to reset Sasol’s strategy to improve long-term shareholder returns in a lower oil price environment.
As an integral part of the response plan and consistent with the Future Sasol Strategy, the Company has been assessing partnering options for its US base chemicals assets, situated at Sasol’s Lake Charles property in Louisiana.
An extensive competitive process was followed to identify an appropriate partner that will enhance the benefits to be gained from the substantial investment in Lake Charles.
Sasol Chemicals USA, a wholly owned subsidiary of Sasol, has now entered into a suite of agreements with a subsidiary of LyondellBasell Industries the effect of which is the disposal of a 50% interest in the LCCP Base Chemicals Business and the portion of the Lake Charles property from which it operates, for US$2 billion and the creation of a 50/50 joint venture in relation to those assets.
The Transaction will represent a significant step towards achieving Sasol’s strategic and financial objectives by materially reducing net debt, and catalysing a rapid shift towards the Future Sasol Strategy.
The LCCP assets within Sasol’s US Performance Chemicals Business including the new Ziegler alcohol plant, ethylene oxide and derivatives plants, and the Guerbet alcohol plant, will be retained by Sasol. Sasol will also continue to have an integrated, low cost ethylene value chain at Lake Charles which will enable it to protect the profitability of the performance chemicals business. Following the Transaction, Sasol will continue to realise the core strategic and financial benefits of its capital investment in the LCCP.