Sasol has given final approval on an $8.1 billion ethane cracker and derivatives complex at its existing site in Lake Charles, Louisiana, the company announced on Monday.

"Sasol's decision to move forward with this project is a defining moment in our company's history, and an important milestone in the execution of our growth strategy," said David Constable, CEO of Sasol. 

"Once commissioned, this world-scale petrochemicals complex will roughly triple our chemical production capacity in the US, enabling Sasol to further strengthen its position in a growing global chemicals market," he added. "The US Gulf Coast's robust infrastructure for transporting and storing abundant, low-cost ethane was a key driver in our decision to invest in America."

At the heart of the project is an ethane cracker that will produce 1.5 million tpy of ethylene, benefiting from significant economies of scale, according to company officials.

The complex also includes six chemical manufacturing plants. Approximately 90% of the cracker's ethylene output will be converted into a diverse slate of commodity and high-margin specialty chemicals for markets in which Sasol says it has a strong position, underpinned by collaborative customer relationships.

"In spite of a largely volatile macroeconomic outlook, we are confident that we will deliver this projectsuccessfully, by drawing on our experience of executing world-scale fuel and chemical facilities, and enlisting the best employees and industry partners," said Constable.

"The Sasol team and our contractors have strong track records in project management, engineering, fabrication and construction of similar large-scale petrochemical complexes, with deep expertise along the US Gulf Coast," he added.

Sasol has selected a joint venture of Fluor and Technip as the primary engineering, procurement, andconstruction management contractor for this project. Sasol's project management team is also supported by WorleyParsons, who bring with them significant mega-project experience.

An additional $800 million will be invested in infrastructure and utility improvements, as well as land acquisition, to establish the Lake Charles location as an integrated, multi-asset site that will enable growth for decades to come, according to Sasol officials.

Sasol says it is well-advanced in raising the funds required for construction and will utilize a variety of international US dollar-based sources. Site preparation is underway, and the company expects that the facility will achieve beneficial operation in 2018.

"The economic benefits of this project will extend to all of our shareholders, 67% of whom are located in South Africa, and will also enable us to pursue further growth opportunities in Southern Africa," said Constable. 

"In addition, this project will deliver significant benefits to Louisiana and the US," he added. "More specifically, it will enhance local investment and job creation in the surrounding communities, while strengthening downstream manufacturing and increasing exports."