Petrochem deals signal bright future

Published 6:00 pm Wednesday, September 21, 2011

Sasol’s announcement last week that it has identified a West Calcasieu Parish site as a potential $10 billion facility reconfirms our area as a major player in our nation’s petrochemical industry.

Though it is not final, most signs point to the fact that our area will land the first gas-to-liquid facility in the United States.

The company said it will undertake an 18-month feasibility study on the location and size of the project. The other competing sites are in the Canadian provinces of British Columbia and Alberta. There, according to Louisiana Economic Development Secretary Stephen Moret, Sasol would partner with another company to build the facility.

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If Sasol decides to locate here — and Gov. Bobby Jindal has gone on record as saying that he’s confident that will happen — Moret said, “it gives you a sense about how confident they are about the potential and the desire to capture all the returns directly to the company.”

Sasol already has two GTL facilities up and running in Qatar and Malaysia, is building another facility in Nigeria and is considering building another plant in Uzbekistan.

The economic impact is staggering. The facility in Westlake could produce 5,500 construction jobs, 850 full-time jobs averaging nearly $90,000, not including benefits, and 4,000 indirect jobs, plus an annual economic ripple of $900 million throughout Southwest Louisiana.

Moret said the Sasol facility has the potential of attracting other downstream plants. He also said the state is dealing with other companies that have expressed an interest in locating a GTL plant in Louisiana.

If it chooses Westlake, Sasol, which is now building a $175 million ethylene tetramerization unit at its Westlake plant — the first of its kind in the U.S. — would become one of the largest employers in Southwest Louisiana, with a permanent workforce of 1,300 employees.

Sasol’s GTL technology and its ethylene unit offer new processes and could usher in a new wave of plants to go along with West Cal petrochemical complex kingpins like Citgo, ConocoPhillips and PPG.

The gas-to-liquid process can covert natural gas into more than 4 million gallons per day of diesel, kerosene and naphtha, a chemical feedstock.

A major lure for Sasol to locate here is the proximity to the huge Haynesville Shale natural gas formation that is being tapped in north Louisiana.

But Moret is quick to point out that this area’s pipeline infrastructure and the stellar reputation of Southwest Louisiana’s petrochemical workforce were significant factors in attracting Sasol.

He also heaped praise on the Chamber/Southwest, the Port of Lake Charles, and, in particular, the Calcasieu Parish Police Jury’s Geographic Information System for their roles in courting Sasol.

The Sasol potential is but one more asset in what is fast becoming a potential construction boom in Southwest Louisiana.

Both Cheniere and Trunkline have announced plans to convert their existing LNG plants for export. Moret said the long-anticipated Leucadia Co-Generation plant is still a strong possibility and that other petrochemical facilities on the west side of the river are gearing up for expansions.

A new hangar at Chennault International Airport that is state and locally funded has the potential of adding at least 500 new jobs between current tenants Northrop Grumman and Aeroframe.

And Mojito Pointe Casino Resort promises 1,500 construction jobs and 2,000 permanent jobs.

Given our relatively low unemployment rate compared to the national average and what lies on the horizon, it’s hard to recall another period in Southwest Louisiana’s history where the economic outlook looms so bright.