Our pick of the latest petrochemical news you need to know

Despite the cancellation of the Louisiana GTL, Sasol remains committed to its Lake Charles petrochemicals complex in Louisiana, which is nearly 80% complete

×

Sasol nixes megaprojects; raises budget for smaller projects

Sasol is dropping its plans for a number of high-profile projects it has deemed unprofitable in favor of smaller investments. The mega projects being dropped include its work in Canada's shale gas market and all of its gas-to-liquids (GTL) greenfield projects--notably its GTL project in Westlake, Louisiana.

In a press release, the company said it will not invest in further GTL projects. Sasol previously announced in 2015 it was delaying a final investment decision on its U.S. project to conserve cash in response to lower oil prices.

“While our current GTL assets are generating good returns and cash flows, the value proposition for Sasol to build new GTL projects is uneconomic against a volatile external environment and structural shift to a low oil price environment,” the company said in a statement.

Following the cancellation of its Louisiana GTL project, which had been expected to cost up to $15 billion, the company is to focus on capital projects with a price tag of between $500 million and $1 billion for the time being.

Sasol said it will focus on specialty chemicals, retail fuels, and oil and gas exploration in western Africa.

Despite the cancellation of the Louisiana GTL, Sasol remains committed to its Lake Charles petrochemicals complex in Louisiana, which is nearly 80% complete. The first units of the ethylene cracker and derivatives complex are expected to begin operations in the first half of 2018.

Rail Company CSX to impose heavy fees on some customers

CSX Corp will charge fees for freight shipments to Mexico and hike charges for customers that fail to load or discharge railcars by agreed deadlines or ship unsafely loaded or overweight railcars beginning in January, according to Reuters.

Demurrage fees for cars carrying flammable materials will rise to $250 per day from $175, and to $150 a day from $105 for non-hazmat cars. Refrigerated cars will be charged $250 per day, up from $200.

Charges for overloaded railcars will rise to $1,000 each from $750, and $1,000 per unsafely loaded railcar, up from $750.

For railcars crossing the U.S.-Mexico border, CSX said it may charge a new fee of $200 per railcar for incomplete or erroneous customs documentation or data, and $25 per railcar for paperwork and processing.

The carrier also said several customers, including U.S. packaged food maker Conagra Brands would no longer be able to use other railroads to move freight in certain locations if CSX’s system cannot handle their cars, a process called “reciprocal switching.” 

The change may force these customers to ship freight by truck.

CSX has been facing service delays and disruptions mainly a result of its operations overhaul. The new fees are an effort to get customers to conform to the new schedules.

Natural gas production in Bakken increases faster than crude

In North Dakota’s Bakken region, the ratio of natural gas production relative to crude oil, known as the gas-oil ratio, has been gradually increasing since 2008 and has increased at a faster rate since 2014, according to the U.S. Energy Information Administration (EIA).

Image: EIA

More than 90% of North Dakota’s crude oil and natural gas production comes from the Bakken region, which includes the Bakken and Three Forks formations. 

Total North Dakota crude oil production peaked at more than 1.2 million barrels/day in December 2014, but production has since dropped to 1.07 million barrels/day in 2017, based on data in EIA’s Monthly Crude Oil and Natural Gas Production Report. 

The record crude oil production in late 2014 was the result of increasing crude oil production from the Bakken and Three Forks formations.

Despite production declines in 2016, North Dakota remained the second-largest oil-producing state, accounting for 11% of total U.S. crude oil production.

While oil production has slowed in North Dakota, natural gas production has continued to grow, reaching a record high of 1.94 billion cubic feet per day (Bcf/day) in August 2017, or the energy equivalent of about 334,000 barrels/day of crude oil. 

Despite the increasing gas-oil ratio, North Dakota still produces more than three times as much energy from crude oil as from natural gas.