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Interview with AUCC Chairperson Carolyn Lamm Before 2012 Uzbekistan-US Annual Business Forum
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Sasol Secures Tax Exemptions for $3.5 Billion Uzbek Plant
www.bloomberg.com of 9/20/2011. By Carli Lourens - Sasol Ltd. (SOL), the largest producer of motor fuels from coal, secured “a range of tax exemptions” for a $3.5 billion gas-to-liquids plant it plans to build with partner Uzbekneftegaz in Uzbekistan.
An agreement signed in the country yesterday also includes “enabling infrastructure” such as roads, rail and utilities to be provided by the government, Johannesburg-based Sasol said today by e-mail. It didn’t specify the tax exemptions.
Sasol is scouring gas-rich regions for sites to build gas- to-liquids plants as it seeks to boost revenue and expand outside South Africa, where it’s the biggest motor-fuels producer. Sasol uses its proprietary Fischer-Tropsch technology to make fuels such as diesel and kerosene from gas or coal.
The company, which built the world’s first commercial-sized fuel-from-gas plant in Qatar, agreed on the Uzbek project with state-controlled Uzbekneftegaz and Petronas Gas Bhd (PTG) this month. Sasol said last week it may also develop a similar plant in Louisiana. That project could cost $8 billion to $10 billion and start as early as 2013, Fairfax I.S. Plc said in a note today.
The South African company is “a pioneer in the area of synthetic petroleum alternatives,” Zacks Equity Research said in a Sept. 15 note. Building plants in gas-rich regions “will strengthen its position in the industry in the coming years.”
Sasol rose 1.5 percent to 350 rand at the 5 p.m. close in Johannesburg trading, valuing the company at 225.1 billion rand ($29.3 billion).
Shift to Gas
Sasol, which makes most of its fuel from coal, is shifting its focus to gas-to-liquids plants on the expectation they’ll be more profitable as coal prices rise. Last week, the company said it reallocated funds it had earmarked for a coal-to-liquids project in China after government-approval delays. In January it ended a study into a possible coal-to-fuels plant in Indonesia.
The Uzbek project will reduce Uzbekistan’s reliance on imported crude oil and motor fuels. Sasol said yesterday the plant may have a capacity of 1.4 million metric tons a year and begin output of fuels such as kerosene, diesel and naphtha in the second half of the decade. Sasol and Uzbekneftegaz each hold 44.5 percent and Petronas 11 percent, it said.
“We are currently looking at an estimated $3.5 billion for the project,” Jacqui O’Sullivan, a Sasol spokeswoman in Johannesburg, said in an e-mail today. “This is currently just a ballpark figure.”
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