Sasol, an international integrated chemicals and energy company based in South Africa, and U.S.-based international energy major Chevron announced that they have signed an agreement that will result in Sasol selling its indirect beneficial interest in the Escravos GTL (EGTL) plant in Nigeria to Chevron.
Escravos GTL is a gas-to-liquids project based in the Escravos region, Nigeria. It is located in the Niger Delta about 100 kilometres southeast of Lagos. The plant converts natural gas into liquid petroleum products.
The project was developed by Chevron Nigeria Limited (75%) and the Nigerian National Petroleum Company (15%). Sasol gained interest in the project early on, acquiring half of Chevron Nigeria’s stake; however, due to increased cost and delays, Sasol reduced its stake to 10% in late 2008.
The gas-to-liquids (GTL) plant was designed to convert 325 million cubic feet of natural gas per day into 33,000 barrels of liquids – principally synthetic diesel. The GTL plant cost USD10 billion, from the original estimated cost of USD1.9 billion in 2005, and started up in the summer of 2014. The plant uses the Fischer-Tropsch process technology and Chevron’s ISOCRACKING technology.
The transaction will release Sasol from associated company guarantees and other obligations. Sasol will continue to support Chevron in the performance of the EGTL plant through ongoing catalyst supply, technology and technical support.
The transaction, for an undisclosed sum, has an agreed economic effective date of 1 September 2019.
Sasol said other sale processes, including its interests in the Republic of Mozambique Pipeline Investment Company pipeline and Central Termica de Ressano Garcia gas-fired power plant in Mozambique, are well underway. In addition, partnering discussions in relation to the Base Chemicals assets in the U.S.A. have also advanced, Sasol said.
In March, Sasol accelerated its asset disposal programme and said that it could sell up to USD2 billion of its shares to ensure that it can pay its debt following a slump in oil prices and fears over the coronavirus outbreak.