February 13, 2019 / 1:43 PM / 10 months ago

First unit at Sasol's Lake Charles chemical plant starts output

JOHANNESBURG, Feb 13 (Reuters) - Sasol on Wednesday began production at the first of seven units at its giant Lake Charles chemical plant in the U.S, boosting shares in the South African petrochemical group.

The plant in Louisiana, which will cut the company’s reliance on fuel, has an expected output of 1.5 million tonnes of ethylene, a chemical used in industries such as packaging, detergents and adhesives.

Shares in Sasol surged 4.7 percent to stand at 409 rand at 1251 GMT.

Sasol, whose main business transforming coal to liquid fuel helped apartheid era South Africa side-step a 1980s oil embargo, expects the project to add $1.3 billion to its annual core earnings, or EBITDA, in the 2022 fiscal year.

The company reported core earnings of 46 billion rand ($3.32 billion) in the 2018 financial year. The capital expenditure on the project could top $11.8 billion, Sasol said in profit guidance last week.

$1 = 13.8745 rand Reporting by Tiisetso Motsoeneng; Editing by Kirsten Donovan

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