Sasol Limited

Update on the Lake Charles Chemical Project - Seite 2

The Board has also commissioned a review to be conducted by independent external experts.  This review will cover the circumstances that may have delayed the prompt identification and reporting of the above-mentioned matters. Upon conclusion of the review the Board will take appropriate action to address the findings.

UPDATE ON KEY PROJECT PARAMETERS

The first derivative unit, Linear Low Density Polyethylene (LLDPE), achieved beneficial operation on 13 February 2019 and the plant continues to ramp up in line with expectations.  We have achieved beneficial operation of the Ethylene Glycol unit (EG), with beneficial operation of the Ethylene Oxide unit (EO) expected in the coming days.  The Ethane Cracker is still expected to achieve beneficial operation in July 2019.  The remainder of the LCCP schedule for beneficial operation is as previously indicated in February 2019 apart from the beneficial operation of the last derivative plant (Guerbet unit), which is expected to be one month later in February 2020.  As of the end of March 2019, overall project completion was at 96%, with construction completion at 89% and capital expenditure on the project amounted to $11,4 billion.

Following the review noted above, the cost estimate for LCCP has been revised to a range of $12,6 – $12,9 billion which includes a contingency of $300 million. The principal factors that impacted the revised cost estimate to complete LCCP are adjustments to the February 2019 cost forecast of approximately $530 million and additional events and remaining work impacting February 2019 cost forecast – approximately $470 million. A contingency of $300 million has also been included.

ACTIONS TAKEN TO DATE

This increase in the anticipated LCCP capital costs is extremely disappointing.  Executive management has implemented several changes since February 2019 to further strengthen the oversight, leadership for the project and frequency of reporting.  Actions include segregation of duties between project controls and finance functions and assigning a Senior Vice President to have responsibility for the LCCP project controls.  Initiatives to improve decision making, transparency and documentation within the project management team are also in progress. The new project leadership has been instrumental in identifying and remediating these issues.