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Sasol

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Sasol is a South African company involved in mining, energy, chemicals and synfuels. In particular, they produce petrol and diesel from coal and natural gas using Fischer-Tropsch process. Sasol mines coal in South Africa and producse gas in Mozambique and oil in Gabon.[1] The company has factories at Sasolburg and Secunda and has taken a stake in projects under construction in Qatar (Oryx GTL), Iran (Arya Polymers) and Nigeria (Escravos GTL).[2]

Sasol is estimated to have consumed approximately 58 million tonnes of coal in 2006, one third of South Africa's coal consumption, as the feedstock for its synthetic fuel and chemicals production.[3]

The company has a branch in North America, called Sasol North America, that is primarily a chemical company. It has manufacturing plants in Lake Charles, Louisiana and Tucson, Arizona. Sasol North America's headquarters are in Houston, Texas (900 Threadneedle, Suite 100, Houston, TX 77079-2990)[4]

History

Sasol was "formed in South Africa in 1950 to make oil from coal for a country with no large crude oil reserves."[5] According to a 2011 Friends of the Earth (FOE) report on the company, Sasol initially ran at a loss, "consuming significant state funds until the 1970s when the oil crisis drove up oil prices."[6]

Sasol's original coal-to-liquids (CTL) plant at Sasolburg was commissioned in 1955. It was subsequently converted into a gas-to-liquids (GTL) facility and is still in operation. Two large CTL production facilities were commissioned in the early 1980s in Secunda, shortly after Sasol was privatised in 1979.[7] Yet the state-owned Industrial Development Corporation (IDC) retained a major shareholding, and FOE states that "Sasol enjoyed substantial state subsidies throughout the 1980s and 1990s when the oil price remained low. It was understood that this would be paid back if oil prices rose – as they did in the 2000s. Sasol then argued that the agreement had lapsed so it would not repay the subsidy. With demand for fuel rising, the government is now looking to Sasol to expand production."[8]

Coal plants

Secunda plant

The Sasol plant in Secunda produces 160,000 barrels of fuel from coal every day, which is used to power buses, planes, and automobiles in the country. The plant is both the largest coal-to-liquids plant and the largest point source of greenhouse gas emissions in the world.[9]

Coal mining

Sasol's coal mining operations are undertaken by Sasol Mining which, according to the company's 2009 annual report, "produces about 40 Mt of coal a year, mostly for gasification feedstock and utilities coal for our complexes at Secunda and Sasolburg. Its main operations comprise the Sigma: Mooikraal operation near Sasolburg and the Bosjesspruit, Brandspruit, Middelbult, Syferfontein and Twistdraai export operations at Secunda". The company states that Sasol Mining contributes 6% to the company's overall profit.[10]

Sasol in May 2012 launched a $423 million shaft at its Twistdraai Mine in South Africa to extend the life of the mine beyond 2039. Thubelisha, in South Africa's eastern Mpumalanga province, will produce up to 10.6 million tonnes of coal per year when it reaches full production by 2018. Sasol is the world's top maker of motor fuel from coal[11]

The U.S. Geological Survey lists Sasol's coal mining operations in Secunda and their 2005 production levels as being:[12]

Coal-to-liquids plans

Qatar

On its website, Sasol states that "through Sasol Synfuels International, we pursue international opportunities to commercialise our gas-to-liquids (GTL) and coal-to-liquids (CTL) technology. In partnership with Qatar Petroleum, we started our first international GTL venture, Oryx GTL, in Qatar, in 2007 and we are developing a GTL plant in Nigeria with Chevron and the Nigerian National Petroleum Corporation."[13]

India

In March 2009 the Indian government announced that it had awarded the north Arkhapal coal block in Orissa to Strategic Energy Technology Systems Ltd, a 50:50 joint venture between the Tata Group and Sasol Synfuels International, the international synfuels subsidiary of Sasol. It is projected that the plant would consume 4 million tonnes of coal and produce 80,000 barrels of crude oil a day at an estimated cost of $55-60 a barrel.[14]

In early 2010 Orissa's Chief minister Naveen Patnaik told reporters that "though we have not identified the location, the proposed plant will be somewhere in the state." It was also reported that the coal would come from the Srirampur area in Talcher. The Business Standard also stated that the project "requires 3,000 acre of land for its main plant, additional land would be required for setting up coal mines, benefication plants, coal handling plants, water reservoirs, power plants and a township" and would involved the establishment of a 1600 megawatt power station. The newspaper also reported that the joint venture was "yet to make a formal application" for the plant the company was pressing the state government "to provide adequate facilities for early commissioning of the project."[15]

In June 2010 the companies stated that the proposed project would cost $10 billion.[16] The allocation of the coal rights for the project was first announced in March 2009.[17]

China

Sasol is also considering a coal-to-liquids plant in China with Shenhua Group and in 2009 signed a memorandum of understanding with Indonesia to investigate an an 80,000 barrel-a-day coal-to-fuel plant.[17]

Sasol and Shenhua submitted an application to China's National Development and Reform Commission (NDRC) in 2009 to build a 94,000 barrel-a-day plant to convert coal into motor fuel in the Ningxia Hui autonomous region. On March 7, 2011, it was announced that the companies received approval from the Chinese environmental ministry for the plant.[18]

Sasol abandons coal-to-fuels plant in Indonesia, but plans to invest in Canada shale gas

In January 2011, Sasol said it was abandoning a plan to build a $10 billion coal-to-fuels plant in Indonesia to "focus on opportunities in the gas-to-fuels industry." The company said it won’t pursue other coal-to-fuels projects after its current ones in China and India, as a “structural shift” in gas prices "make gas-to-fuels an attractive industry to be in." In 2009, Sasol had signed a memorandum of understanding with Indonesia for the possible development of an 80,000 barrel-a-day coal-to-fuel plant in the country, and said it would spend $10 billion on the plant. PT Tambang Batubara Bukit Asam, a domestic Indonesian coal company, said it couldn’t supply enough coal for the project, which would need about 1 billion metric tons.[19]

Sasol, which built the world’s first commercial-sized gas-to-fuels plant in Qatar, plans to buy a stake in Talisman Energy’s Canadian shale gas assets for C$1.05 billion ($1.06 billion) and may also build a motor-fuels plant in the country. Sasol uses proprietary technology to produce diesel, gasoline and jet fuel from coal and gas.[19]

Gas-to-liquids

Sasol has gas-to-liquids plants in South Africa and Qatar. On Dec 3, 2012, Sasol said it would build America’s first commercial plant to convert natural gas to diesel and other liquid fuels. Sasol said it is designing the Louisiana plant to produce 96,000 barrels of fuel. It will be the second-largest plant of its kind in the world, after Royal Dutch Shell’s Pearl plant in Qatar, at an estimated cost of $11 to $14 billion. The facility will include a gas processing plant, a chemical plant, and a refinery, and will be located near shale gas fields in Texas. Burning is scheduled to begin in 2018. The state encouraged the project with more than $2 billion worth of tax credits and other incentives.[20]

Sasol and international climate negotiations

Sasol is a vocal supporter of carbon capture and storage (CCS) as a solution to climate change, participating as a South African representative on the international Carbon Sequestration Leadership Forum (CSLF). Following extensive lobbying by Sasol and others, CCS was recognised as a possible appropriate technology for inclusion in the Clean Development Mechanism by the parties to the UN climate talks in Cancún.

Sasol is involved in carbon trading through the Clean Development Mechanism (CDM). It has one CDM approved project for destruction of nitrous oxide, qualifying it for Certified Emission Reductions in 2008 that it could sell off. Sasol also attempted to register the substitution of gas for coal in its energy feeds as a CDM project. This failed the ‘additionality’ test, meaning that the CDM believed the project would have happened anyway.

Sasol has also spoken out to oppose legally-binding reductions in greenhouse gas emissions. Speaking at the World Economic Forum in 2011, Sasol’s then chief executive Pat Davies said: “I think we should first understand fully the impacts of climate change before we set hard, legally binding global targets.”[21]

Greenhouse gas emissions

Sasol was listed as the country's top carbon emitter in the Carbon Disclosure Project’s JSE 100 Report for 2011, releasing 61.2 million metric tons of CO² annually, according to the National Business Initiative. The report was released during the UN’s 17th Conference of Parties (COP17) climate change talks in Durban, S.A.

The country’s largest emitter is still Eskom, which accounted for 45 percent (230.3 million metric tons) of SA’s total CO² emissions in 2011. Yet Eskom does not appear in the JSE report because it is not a listed company.

The report said the JSE’s top 100 companies accounted for about 20 percent of SA’s total annual carbon emissions, which are estimated to be 510 million metric tons, ranking the country among the world’s top 20 greenhouse-gas emitters. The other JSE-listed companies in the top 10 list of CO² emitters were Arcelor Mittal SA, Pretoria Portland Cement, BHP Billiton, Evraz Highveld Steel and Vanadium, Anglo American, Sappi, Harmony Gold Mining, Mondi Group and Gold Fields.[22]

Synfuels for aviation

In September 2010, Sasol set off the world's first passenger flight powered with only synthetic jet fuel (synfuel), produced from coal. The fuel, produced by the coal-to-liquids (CTL) process, is the only fully synthetic jet fuel to have been approved as a commercial aviation turbine fuel.[23]

Sasol CEO Pat Davies said that the new jet fuel had undergone significant testing, burning 800 000 liters of fuel in the process. Davies said the synfuel had lower CO2 output than conventional jet fuel, and that the synthetic fuel provided an alternative source of supply to oil, in a world where demand is always on the increase. Davies said that in terms of energy security for South Africa, it was a "sensible" path to pursue: "South Africa is sitting on an abundance of coal and natural gas reserves, and Sasol consists of the technology, in line with what we are doing with petrol and diesel, to convert these resources into jet fuel."[23] Recent research from three scientific journals, however, suggest that usable coal reserves in South Africa are much smaller than previously thought, and that annual production could reach a peak and begin to decline within a decade - or might have peaked already.[24]

Davies said that the petrochemicals company would not be making the fuel 100% commercially available yet. Sasol has been providing South Africa's OR Tambo International Airport with a 50% synthetic jet fuel component since 1999, and Davies pointed out that, currently, the company had the capacity and logistics in place to supply the airport with increasing volumes of synthetic jet fuel if needs be. Further, the South African technology company has entered into a number of international ventures to implement its CTL and gas-to-liquids technology across the globe. South Africa remains Sasol's home base with its largest facility located in Secunda, however, the group is also building plants in the Middle East, Nigeria, and its biggest venture decision yet will be set up in China. All of those plants will also have the potential, depending on the commercial viability, to produce the synthetic jet fuel from their natural resources.[23]

Directors

Accessed June 2009: [25]

Contact Details

Website: http://www.sasol.com/sasol_internet/frontend/navigation.jsp?navid=1&rootid=1

Articles and Resources

Sources

  1. Sasol Organizational Web page, accessed November 29, 2010
  2. "Annual Report 2011" Sasol Website Investment Center, 2011.
  3. Eskom, "Coal in South Africa Revision 5", January 2008.
  4. Sasol North America, Inc. Organizational Web site, accessed November 29, 2010
  5. "Sasol History" Sasol Website, accessed Dec. 2011.
  6. "how corporations rule: sasol and south africa's climate policy" Friends of the Earth, 2011 Report.
  7. "Sasol History" Sasol Website, accessed Dec. 2011.
  8. "how corporations rule: sasol and south africa's climate policy" Friends of the Earth, 2011 Report.
  9. Kate Sheppard, "Your Tax Dollars at Work: A Giant Coal Plant in South Africa" Mother Jones, Dec. 9, 2011.
  10. Sasol, Sasol 200 Annual Review", page 33.
  11. "S.Africa's Sasol launches new $423 mln coal shaft" Reuters, May 22, 2012.
  12. Thomas R. Yager, "The Mineral Industry of South Africa", 2005 Minerals Yearbook, U.S. Geological Survey, August 2007.(Pdf)
  13. Sasol, "Business overview", Sasol website, accessed June 2010.
  14. "Tatas, Jindals win coal-to-oil crowns", The Telegraph, March 3, 2009.
  15. "Tata Steel-Sasol to set up CTL plant in Orissa", Business Standard, January 18, 2010.
  16. "Sasol-Tata Steel JV aims to produce 80,000 bpd by 2018", Business Standard, June 02, 2010.
  17. 17.0 17.1 "Sasol-Tata to invest $10bn in coal to motor fuel", Bloomberg, June 3, 2010.
  18. "Sasol and Shenhua's Coal-to-Fuel Plant Wins Chinese Environmental Approval" Bloomberg, March 7, 2011.
  19. 19.0 19.1 Bambang Djanuarto and Carli Lourens, "Sasol Abandons $10 Billion Indonesian Coal-to-Fuels Plan, Focuses on Gas" Bloomberg, Jan. 18, 2011.
  20. Clifford Krauss, "South African Company to Build U.S. Plant to Convert Gas to Liquid Fuels," Ny Times, December 3, 2012.
  21. "how corporations rule: sasol and south africa's climate policy" Friends of the Earth, 2011 Report.
  22. Suren Naidoo, "Sasol tops list of emitters" IOL News, December 7, 2011.
  23. 23.0 23.1 23.2 Loni Prinsloo, "Sasol makes world's first fully synthetic fuel-powered flight" Engineering News Online, Sep. 21, 2010.
  24. Kevin Davie, "SA is nearing peak coal, say scientists" Mail & Guardian Online, Sep. 25, 2010.
  25. People, Sasol, accessed June 24, 2009.

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