Officials with Sasol announced Friday that 50 percent of the stake in its ethane cracker, two polyethylene plants, as well as associated infrastructure and utilities at its Lake Charles Chemicals Complex, will be sold to LyondellBasell at a cost of $2 billion.
The joint venture between the two companies, Louisiana Integrated PolyEthylene JV LLC, is subject to approval by Sasol shareholders and regulatory approvals.
Under the agreement, LyondellBasell will operate the three units on Sasol’s behalf, with Sasol retaining 50 percent ownership. Meanwhile, Sasol will continue to fully own and operate its Lake Charles research and development facility, along with 11 other Lake Charles chemical manufacturing sites. Sasol will also retain ownership of its vacant, develop-ready land on site.
The joint venture agreement is expected to close by the end of this year. Some current Sasol employees will become employees of LyondellBasell once the deal reaches official closure.
Sasol President and CEO Fleetwood Grobler said in a statement that partnering with LyondellBasell is a major step in creating Future Sasol, “a more sustainable business for the long term.”
Bob Patel, LyondellBasell CEO, said during a conference call Friday that the agreement allows for the complex’s value to be maximized, while advancing strategic objectives for both companies.
“We believe that our share of the joint venture will generate approximately $50 million in synergies for LyondellBasell over the next few years,” he said.
Sasol Spokesperson Kim Cusimano said Sasol “remains committed to its Lake Charles complex as the company’s Gulf Coast regional operations and growth hub.”
Sasol officials announced in April an anticipated loss ranging from $50 million to $100 million for the Lake Charles Chemicals Complex because of falling oil prices and a worldwide drop in product demand. Senior and executive employees took a 20 percent salary cut for eight months, starting in April. Supervisory-level employees took a 10 percent cut.
LyondellBasell’s polymers plant in Westlake sits on 260 acres and has 250 employees and contractors.