August 26, 2019 / 1:58 PM / 6 months ago

UPDATE 1-S.Africa's Sasol lowers LCCP earnings, delays start-up dates for units

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JOHANNESBURG, Aug 26 (Reuters) - Sasol said on Monday it had reduced its 2020 core earnings target for its U.S. ethane cracker project and revised the dates for the start-up of some of the company’s downstream units following technical issues.

Sasol lowered its earnings before interest, tax, depreciation and amortisation(EBITDA) guidance for the Lake Charles Chemicals Project (LCCP) for the 2020 financial year to between $150 to $300 million from between $300 to $350 million.

Sasol delayed the release of its annual financial results earlier this month due to possible “control weaknesses” at the project, sending shares in the chemicals and energy company sharply lower.

The company said it had pushed out the dates for beneficial operation of its low density polyethylene unit from mid October to November, its ziegler and ethoxylates units to January and the guerbet unit to March.

Sasol said the cost target for LCCP of between $12.6 to $12.9 billion remains unchanged.

“We remain confident that the incremental costs resulting from the delay can be absorbed within the existing base cost and contingency buffer,” the company said in a statement.

The project in Louisiana, which will convert natural gas into the plastics ingredient ethylene, was initially expected to cost $8.9 billion in 2014 and has seen delays and cost increases. (Reporting by Tanisha Heiberg, editing by Louise Heavens)

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