Sasol Announces Largest Manufacturing Investment In Louisiana History

Louisana Gov. Bobby Jindal and Sasol Ltd. CEO David Constable have announced that the international integrated energy and chemicals company will invest between $16 billion and $21 billion in an integrated gas-to-liquids (GTL) and ethane cracker complex in Westlake, LA. The project is expected to create 1,253 direct jobs and an additional 5,886 new indirect jobs. Sasol will also retain 435 existing direct jobs in Westlake as a result of the project.

Including direct and indirect effects, the Sasol project will produce a total economic impact over the next 20 years of $46.2 billion, according to an economic impact study commissioned by Louisiana Economic Development (LED) and completed by the LSU Division of Economic Development. According to Dr. Loren Scott, Professor Emeritus of Economics at LSU, Sasol’s planned facility will be the largest single manufacturing investment in Louisiana history.

Gov. Jindal said, “This project will be the largest single manufacturing investment in the history of Louisiana, and it also represents one of the largest foreign direct investment manufacturing projects in the history of the entire United States.”

The GTL facility, the first of its kind in the USA, will produce high quality transportation fuels, including GTL diesel, as well as other value-adding chemical products. GTL diesel is a cleaner-burning, high-performance fuel with significant emission reduction benefits. GTL diesel can be used in existing vehicles and fuel delivery infrastructure without modifications.

“By incorporating GTL technology into the USA’s energy mix, states such as Louisiana will be able to advance the country’s energy independence through a diversification of supply. We greatly appreciate the support we have received from the State of Louisiana and Gov. Jindal, along with the people of Calcasieu Parish, in reaching these significant project milestones. We look forward to furthering our interests in the region and continuing our engagement with all our stakeholders,” Constable said

For the past three years, Louisiana has actively cultivated GTL projects with Sasol and other leading energy companies around the world. In early 2011, LED’s Business Expansion and Retention Group, or BERG, joined the Southwest Louisiana Economic Development Alliance and the Port of Lake Charles to identify potential sites in Southwest Louisiana using GIS mapping technology. Ultimately, a 650-acre site near Sasol’s existing facilities was identified that would meet the project’s needs, and a September 2011 announcement identified the company’s site selection and its decision to move forward with a final feasibility study for the GTL facility.

“The Sasol expansion confirms that Southwest Louisiana is a great place to do business,” said Southwest Louisiana Economic Development Alliance President and CEO George Swift. “This project will provide many well-paying careers and opportunities for various ancillary businesses in Southwest Louisiana.”

To secure the project, Louisiana offered Sasol a custom incentive package that includes a performance-based grant of $115 million for land acquisition and infrastructure costs associated with the facility. Sasol also will receive the services of LED FastStart™, a workforce training program. In addition, the company will qualify for Louisiana’s new Competitive Projects Payroll Incentive (up to 15 percent payroll rebate for each GTL job) and Quality Jobs Program (up to 6 percent payroll rebate for each ethane cracker job).

To support the project’s workforce needs during construction and operations, the state will be investing $20 million for a new training facility and associated equipment focused on industrial technology at SOWELA Technical Community College in Lake Charles. Finally, Sasol is expected to utilize the Industrial Tax Exemption Program for both the GTL and the ethylene facilities.

The new training center initially will focus primarily on meeting the training needs of Sasol; once Sasol’s initial needs have been met, the facility will serve the broader needs of growing manufacturers throughout the region.

Dr. Neil Aspinwall, Chancellor of SOWELA, said, “Southwest Louisiana is going to be the epicenter of approximately $25-30 billion of industry expansion within the next few years. Along with these expansions comes the need for specific training programs and services to address the industry specific occupations that will be needed as a result of this growth. This new facility will provide the means to plan, design and deliver the training programs and services to help ensure that our business and industry partners are successful. Projects such as this prove that Louisiana is very proactive, business friendly and committed to providing for the economic growth and overall well being of the state as a whole.”

Hiring for the GTL and ethane cracker facilities will begin in 2014. Operations of the first plant are expected to start in 2017, with full employment reached within two years after commercial operations begin.