Sasol

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Sasol Limited
PredecessorSuid-Afrikaanse Steenkool-, OLie- en Gasmaatskappy
Founded1950 (1950)
Headquarters
Sandton
,
South Africa
Key people
Stephen Westwell (Independent non-Executive Director and Chairman of the Board) Fleetwood Grobler (Executive Director, President and CEO)
Revenue$12.26 billion (2020)
$(7.15) billion (2020)
$(5.867) billion (2020)
Number of employees
30,100[citation needed]
Websitewww.sasol.com

Sasol Limited is an integrated energy and chemical company based in

chemicals, coal tar, and electricity.[1]

Sandton, Johannesburg
, South Africa

Sasol is listed on the

Ninety One,[5] and others.[6] Sasol employs 30,100 people worldwide and has operations in 33 countries.[7] It is the largest corporate taxpayer in South Africa and the seventh-largest coal mining company in the world.[8]

History

The incorporation of Sasol

The previous Sasol logo

South Africa has large deposits of coal, which had low commercial value due to its high

M. W. Kellogg Limited, and in 1950, Sasol was formally incorporated as the South African Coal, Oil, and Gas Corporation (from the Afrikaans of which the present name is derived: Suid-Afrikaanse Steenkool-, Olie- en Gas Maatskappy), a state-owned company. Commissioning of the Sasol 1 site for the production of synfuels started in 1954. Construction of the Sasol 2 site was completed in 1980, with the Sasol 3 site coming on stream in 1982. The Zevenfontein farm house served as Sasol's first offices and is still in existence today.[9][10]

Coal mining

To support the required economies of scale for

Gas-to-liquids technology converts natural gas, predominantly methane to liquid fuels.[9][10]
Today, Sasol mines more than 40 million tons (Mt)[11] of saleable coal a year, mostly gasification feedstock for Sasol Synfuels in Secunda. Sasol Mining also exports some 2.8 Mt of coal a year. This amounts to roughly 22% of all the coal mined in South Africa. Underground mining operations continue in the Secunda area (Bosjesspruit, Brandspruit, Middelbult, Syferfontein, and Twistdraai collieries) and Sigma: Mooikraal colliery near Sasolburg. As some of these mines are nearing the end of their useful lives, a R14bn mine replacement program has been undertaken. The first of the new mines is the R3.4bn Thubelisha shaft, which will eventually be an operation delivering more than 8M tons/annum (mtpa) of coal over 25 years. The Impumelelo mine, which will replace the Brandspruit operation, is set for first production in 2015. It will be ramped up to produce 8.5 mtpa, and can later be upgraded to supplying some 10.5 mtpa. This coal will be used exclusively by the Sasol Synfuels plant. An underground extension of the Middelbult mine is also on the cards, with the main shaft and incline shaft being replaced by the Shondoni shaft. The first coal from the new complex was expected to be delivered in 2015.[12]

The Secunda collieries form the world's largest underground coal operations.[13]

In conjunction with the continuous improvement in the Fischer–Tropsch process and catalyst, significant developments were also made in mining technology. Coal mining at Sasol from the early days has been characterised by innovation. Sasol Mining mainly uses the

room and pillar method of mining with a continuous miner. Sasol successfully used the longwall mining method from 1967 to 1987. Today, Sasol is one of the leaders in coal-mining technology and was the first to develop in-seam drilling from the surface using a directional drilling methodology. This has been developed into an effective exploration tool.[14]
Working with Fifth Dimension, Sasol developed a virtual reality technology to help train continuous miner operators in a 3D environment in which various scenarios can be simulated, including sound, dust and other signs of movement.[15] This has recently been expanded to include shuttle car, roof-bolting, and load-haul dumper simulators.

Fischer–Tropsch reactor technology

The initial reactors from Kellogg and Lurgi gasifiers were tricky and expensive to operate. The original reactor design in 1955 was a circulating

catalyst bed around the reactor, which is energy intensive and not efficient as most of the catalyst is not in the reaction zone. Sasol then developed fixed fluidized bed (FFB) reactors in which the catalyst particles were held in a fixed reaction zone. This resulted in a significant increase in reactor capacities. For example, the first FFB reactors commercialised in 1990 (5 m diameter) had a capacity of about 3,000 barrels per day, while the design in 2000 (10.7 m diameter) had a capacity of 20,000 barrels per day. Further advancements in reactor engineering have resulted on the development and commercialisation of Sasol Slurry Phase Distillate (SSPD) reactors which are the cornerstone of Sasol's first-of-a-kind GTL plant in Qatar.[9][10]

From fuels to chemicals

The fuel price is directly linked to the oil price, so is subject to potentially large fluctuations. With Sasol only producing fuels, this meant that its profitability was largely governed by external macroeconomic forces over which it had no control. How could Sasol be less susceptible to the oil price? The answer was right in front of them, in the treasure chest of chemicals co-produced in the Fischer–Tropsch process.

Chemicals
have a higher value per ton of product than fuels.

In the 1960s ammonia, styrene, and butadiene became the first chemical intermediates sold by Sasol. The ammonia was then used to make fertilizers. By 1964, Sasol was a major player in the nitrogenous fertilizer market. This product range was further extended in the 1980s to include both phosphate- and potassium-based fertilizers. Sasol now sells an extensive range of fertilizers and explosives to local and international markets, and is a world leader in its low-density ammonium nitrate technology.[16]

With the extraction of chemicals from its Fischer–Tropsch product slate coupled with downstream functionalization and on-purpose chemical production facilities, Sasol moved from being just a South African fuels company to become an international integrated energy and chemicals company with over 200 chemical products being sold worldwide. Some of the main products produced are diesel, petrol (

perfumes and plastic bottles.[17]

In South Africa, the chemical businesses are integrated in the Fischer–Tropsch value chain. Outside South Africa, the company operates chemical businesses based on backward integration into feedstock and/or competitive market positions for example in Europe, Asia, and the United States.[17]

Operations

A Sasol Garage in Boksburg, close to the company's headquarters in Johannesburg, South Africa

Sasol has exploration, development, production, marketing and sales operations in 31 countries across the world, including Southern Africa, the rest of Africa, the Americas, Europe, the Middle East (West Asia), Russia, Southeast Asia, East Asia, and Oceania.[18]

The Sasol group structure is organised into two upstream business units, three regional operating hubs and four customer-facing strategic business units.[7]

Operating business units

Operating Business Units comprise the mining division and exploration and production of oil and gas activities, focused on feedstock supply.[19]

Sasol Mining operates six coal mines that supply feed-stock for

Secunda (Sasol Synfuels) and Sasolburg (Sasolburg Operations) complexes in South Africa
. While the coal supplied to Sasol Synfuels is mainly used as gasification feedstock, some is used to generate electricity. The coal supplied to the Sasolburg Operations is used to generate electricity and steam. Coal is also exported from the Twistdraai Export Plant to international power generation customers.

Sasol Exploration and Production International (SEPI) develops and manages the group's upstream interests in oil and gas exploration and production in Mozambique, South Africa, Canada, Gabon, and Australia.[20]

Regional operating hubs

These include operations in Southern Africa, North America and Eurasia.[21]

The Southern African Operations business cluster is responsible for Sasol's entire Southern Africa operations portfolio, which comprises all downstream operations and related infrastructure in the region. This combined operational portfolio has simplified and consolidated responsibilities relating to the company's operating facilities in Secunda, which are divided into a synthetic fuels and chemicals component, Sasolburg, Natref, Sasol's joint-venture inland refinery with TotalEnergies, and Satellite Operations, a consolidation of all Sasol's operating activities outside of Secunda and Sasolburg.[22]

The International Operations business cluster is responsible for Sasol's international operations in Eurasia and North America, which include its US mega-projects in Lake Charles, Louisiana.[23]

Strategic business units

Energy business

  • Southern Africa Energy
  • International Energy

The energy business manages the marketing and sales of all oil, gas and electricity products in Southern Africa, which have been consolidated under a single umbrella. In addition, this cluster oversees Sasol's international GTL (gas to liquids) ventures in Qatar, Nigeria and Uzbekistan.[24]

Chemical business

  • Base Chemicals
  • Performance Chemicals

The global chemicals business includes the marketing and sales of all chemical products, both in southern Africa and internationally. The chemicals business is divided into two niche groupings; Base Chemicals, where its fertilisers, polymers and solvents products lie, and performance chemicals, comprising key products which include

alumina and a speciality gases sub-division.[25]

In South Africa, the chemical businesses are integrated into the

Fischer–Tropsch
value chain. Outside South Africa, the chemical businesses are operated based on backward integration into feedstock and/or competitive market positions.

Group functions

Group Technology manages the research and development, technology innovation and management, engineering services and capital project management portfolios. Group Technology includes Research and Technology (R&T), Engineering and Project Services and Capital Projects.[26]

Major projects

United States

Sasol has granted final approval for a US$11 billion

U.S. Gulf Coast's robust infrastructure for transporting and storing abundant, low-cost ethane was a key driver in the decision to invest in America." The ethane cracker will also be supported by six chemical manufacturing plants.[27][28][29][30][31]

By January 2015 construction was in full swing. At peak the project will create 5000 construction and 1200 permanent jobs and cost $11 billion to $14 billion.[32]

Qatar

Main article: Oryx GTL

The

liquid petroleum gas.[33][34]

Uzbekistan

Main article: Uzbekistan GTL

The proposed Uzbekistan GTL project is a partnership between Sasol, Uzbekneftegaz and Petronas.[35][36][37] Sasol reconsidered its involvement in March 2016

Mozambique

Sasol is developing a 140 MW gas-fired electricity generation plant in partnership with power utility EDM.[38] This gas project came into operation in 2004, and is a joint venture agreement between Sasol Petroleum International, Empresa Nacional de Hidrocarbonetos (ENH), and the International Finance Corporation.

Technology

Natref Refinery

Sasol is also involved in conventional

Environmental Management System.[43][44]

Controversies

In 2009 Sasol agreed to pay an administrative penalty of R188 million as part of a settlement agreement with the Competition Commission of South Africa for alleged price fixing, in which a competitor alleged that Sasol was abusing its dominance in the markets for fertilisers by charging excessive prices for certain products. Sasol won an appeal on the case and will not be paying the settlement anymore.[45]

Sasol also had to pay a €318 million fine to the European Commission (EC) in 2008, which is about R3.7 billion, for participating in a paraffin wax cartel. Despite its indication that it would appeal the fine amount, the full amount had to be paid to the EC within three months of the fine being issued.[46][47]

Sasol has been levied with a R1.2bn tax provision by the Tax Court on 30 June 2017 on the back of its international crude oil purchases between 2005 and 2012. In its 2017 financial results announced on 21 August 2017, the chemical conglomerate agreed upon footing the R1.2bn tax liability. If the court's interpretation is implemented for the following two years – 2013 and 2014 – Sasol Oil's crude purchases could result in a further tax exposure of R11.6bn, thus summing up a total tax figure up to R12.8bn.[48]

A $4 billion cost and schedule overrun at Sasol's Lake Charles project resulted in the resignation of the joint CEOs in October 2019. Adverse weather, poor subsurface conditions, and a "culture of fear" which undermined transparent reporting, were cited as contributing reasons for the over-runs.[49][50][51][52]

Greenhouse gas emissions

Due to the stoichiometry of hydrogen production by coal gasification and the Fischer Tropsch reaction, the production of Sasol Secunda's liquid fuels result in some of the highest specific GHG emissions in the world.

Sasol's Secunda CTL plant is, as of 2020, the world's largest point source of greenhouse gas, at 56.5 Mt/a CO2.[53]

Sasol is exploring alternatives such as green hydrogen which is currently being produced by the electrolysers at the Sasolburg plant. These are powered by renewable energy in the form of a 3 MW solar farm.[54]

Air Liquide acquired 16 of Sasol's energy intensive cryogenic air separation trains in 2020 which are capable of producing 42 000 t/d of pure oxygen. [55]

Sasol and Air Liquide plan to purchase 900 MW of renewable electricity as wind and solar power to reduce CO2 emissions as per their stated emissions reduction programmes: 30% reduction in CO2 from the FY17 baseline by 2030. [56] [57]

See also

References

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