Sasol Profile
Sasol Limited (Sasol) operates as a global chemicals and energy company.
The company harnesses its knowledge and expertise to integrate sophisticated technologies and processes into world-scale operating facilities. The company safely and sustainably sources, produces and markets a range of high-quality products in 22 countries, creating value for stakeholders.
Marketing Channels and Principal Markets
In its Mining and Gas segments, the company makes use of direct sales models, long-term marketing gas sales agreements and short-term crude oil sale and purchase agreements. Piped gas is sold to wholesalers and end-users in South Africa; and electricity is sold to Electricidade de Moçambique (EDM) in Mozambique.
In its Fuels segment, marketing channels can be divided into the following main areas: liquid fuel sales to licensed wholesalers; and liquid fuels sales to retailers and end-users and liquid fuels overland exports into other parts of Southern Africa.
In its Chemicals segments, the company’s products are sold to customers worldwide with a significant part under annual and multi-year contracts. Marketing channels can be divided into the following main areas per segment:
In Chemicals Africa, Advanced Materials consist of cobalt catalyst and carbon sold largely to international markets. Base Chemicals produces polymers, fertilisers and explosives, phenolics, methanol and some other products which are sold mainly to customers in South Africa with the exception of polypropylene and phenolics, which are mainly exported. Explosives intermediates are sold to the company’s partner Enaex, which converts these to final products for supply to the Sub-Saharan Africa mining industry. Essential Care exports the South African-produced C6+ alcohols to international markets for external sales or internal use in surfactant facilities across the globe. Performance Solutions’ products included Fisher Tropsch-based and paraffin wax, solvents and comonomers which are substantially exported to international markets for external sales.
In Chemicals America, Advanced Materials consists of alumina sold largely within North America with some exports to Europe and Asia. For Base Chemicals, polyethylene is produced and marketed on behalf of Sasol by Equistar Chemicals LP, an affiliate of the company’s joint venture partner LyondellBasell. The produced ethylene is either consumed internally for derivatives or sold to external customers in the U.S. merchant market. Mono Ethylene Glycol (MEG) is marketed and distributed on behalf of Sasol by third party. Phenolics are largely exported to international markets. Essential Care includes surfactants, EO, C6+ alcohols, Linear Alkyl Benzene (LAB0 and paraffins and Performance Solutions includes the sale of comonomers, speciality parrafins and speciality alcohols mainly within the Americas region, with some sales to Europe and Asia.
In Chemicals Eurasia, Advanced Materials includes the sale of alumina mainly within Europe with some sales in other regions, including the Americas and Asia. Essential Care consists of surfactants, EO, C6+ alcohols, LAB and paraffins sales mainly within Eurasia with some sales in the Americas. Performance Solutions covers the sale and production of speciality alcohols, emulsions, and until 1 March 2022, paraffin wax, as well as processing South African Fisher Tropsh-based waxes further for selling mainly in Europe, as well as into Asia, the Americas and Africa. Glycol ethers from Eurasia are largely sold within the region, with some additional global sales.
Segments
The company’s operating model includes two distinct businesses, Energy and Chemicals.
The Energy business manages the marketing and sale of all fuel, coal, gas and oil products in Southern Africa.
The Chemicals business includes the marketing and sale of all chemical products in Africa, America and Eurasia.
Mining
Mining is responsible for securing coal feedstock for the Southern African value chain, mainly for gasification, but also to generate electricity and steam. Coal is sold for gasification and utility purposes to Secunda Operations, for utility purposes to Sasolburg Operations and to third parties in the export market. Coal is supplied to Secunda Operations on arms-length terms and to Sasolburg operations based on a long-term supply contract with inflation linked escalation.
Gas
The Gas segment reflects the upstream feedstock, transport of gas through the ROMPCO pipeline, and external natural and methane rich gas sales. Mozambican gas is sold under long-term contracts to the Sasol operations and to external customers.
Fuels
The Fuels segment comprises the sales and marketing of liquid fuels produced in South Africa. Sasol supplies approximately 40% of South Africa's domestic fuel need through retail and wholesale channels. Liquid fuels are blended from fuel components produced by the Secunda Operations, crude oil refined at Natref, as well as some products purchased from other refiners. Liquid fuel products are sold under both short- and long-term agreements for both retail sales and commercial sales, including sales to other oil companies.
Chemicals Business
Chemical products are grouped into Advanced Materials, Base Chemicals, Essential Care Chemicals and Performance Solutions.
The Chemicals businesses sell the majority of their products under contracts at prices determinable from such agreements. Turnover is recognized in accordance with the related contract terms, at the point at which control transfers to the customer and prices are determinable and collectability is probable.
Intellectual Property
The Sasol Slurry Phase Distillate (Sasol SPD) process—Based on the company’s Technology function’s extensive experience in the commercial application of the Fischer-Tropsch (FT) technology, it has successfully commercialized the FT-based Sasol SPD process for converting natural gas into high-quality, environment-friendly Gas to Liquid (GTL) diesel, GTL kerosene and other liquid hydrocarbons.
The Sasol SPD process integrates the following three main technologies, each of which is commercially proven:
the Haldor Topsøe SynCOR reforming technology, which converts natural gas and oxygen into syngas;
the company’s Sasol Low Temperature Fischer-Tropsch (Sasol LTFT) technology, which converts syngas into hydrocarbons; and
the Chevron Isocracking technology, which converts hydrocarbons into particular products, mainly diesel, naphtha and Liquefied Petroleum Gas (LPG).
The Sasol SPD process converts natural gas into diesel and other liquid hydrocarbons, which are generally more environmentally friendly and of higher quality and performance compared to the equivalent crude oil-derived products. The Sasol SPD process can further be adopted to produce differentiated value-added products, such as GTL base oils. The superior quality of GTL base oils positions these products firmly as premium components in the formulation of top tier lubricants.
The company’s Sasol LTFT technology can also be integrated into flow schemes utilising green hydrogen and environmentally friendly carbon feedstocks in order to produce green products, including Sustainable Aviation Fuel.
Key Contracts
ORYX GTL, the company’s 49% joint venture in Qatar, purchases natural gas feedstock from Al Khaleej Gas, a joint venture between ExxonMobil Middle East Gas Marketing Limited and Qatar Petroleum, under a gas purchase agreement with a contracted minimum off-take volume. The agreement commenced in November 2005 and is valid for 25 years.
CTRG, the company’s 49% joint operation in Mozambique, purchases natural gas feedstock produced at the company’s natural gas Pande-Temane Petroleum Production Agreement (PPA) asset. CTRG has a gas transport agreement with the Republic of Mozambique Pipeline Investments Company (Pty) Ltd (ROMPCO) and a 45 power purchase agreement with EDM. The agreements commenced on 27 February 2015 and are valid for 20 years. On 20 December 2020, the company signed a sale securities purchase agreement for a consideration of R2,6 billion (U.S.$163,8 million) with Azura Power Limited for the divestment of its full shareholding in Central Termica de Ressano Garcia (CTRG). The transaction reached completion effective on 29 April 2022 following the fulfilment of all conditions precedent.
Ownership of the Republic of Mozambique Pipeline Investments Company (Pty) Ltd (ROMPCO) was originally 50% by Sasol South Africa Limited (SSA); 25% the South African Gas Development Company SOC Limited (iGas) (a subsidiary of the Government of South African-owned Central Energy Fund (CEF)); and 25% Companhia Moçambicana de Gasoduto SA (CMG), a subsidiary of Government of Mozambique-owned Empresa Nacional de Hidrocarbonetos EP (ENH). ROMPCO transports natural gas from the Pande and Temane gas fields in Mozambique to markets in Mozambique and South Africa via the Mozambique-Secunda gas transmission pipeline (MSP). On 14 May 2021, SSA concluded a sale and purchase agreement to sell a 30% equity interest in ROMPCO, which was subject to pre-emptive rights by the other shareholders. CMG and iGas exercised their pre-emptive rights on 25 June 2021 and the sale was therefore concluded with CMG and iGas. The transaction closed on 29 June 2022. SSA retains a 20% shareholding in ROMPCO and continues to operate and maintain the pipeline.
On 9 July 2021, SSA concluded an agreement to sell its sodium cyanide business to a South African, B-BBEE empowered subsidiary of a Czech Republic-based company specialising in cyanide production. The transaction is expected to close in the second half of calendar 2022 subject to the outcome of the appeal process underway following the prohibition of the disposal by the South Africa Competition Commission.
On 1 December 2020, Sasol closed a transaction creating a joint venture with LyondellBasell Offtake, LLC called Louisiana Integrated Polyethylene JV LLC (LIP JV). In this transaction, Sasol transferred certain production units at the Lake Charles Chemicals Project to LIP JV and sold 50% of the shares of LIP JV to LyondellBasell. At the same time, both Sasol and LyondellBasell and certain affiliates entered into a series of related agreements providing various services to each other and to LIP JV, one of which was the marketing agreement with Equistar Chemicals LP, an indirect subsidiary of LyondellBasell. Equistar Chemicals LP will market and sell Sasol’s polyethylene along with LyondellBasell polyethylene manufactured by the Louisiana Integrated Polyethylene JV LLC (LIP JV) production units.
On 22 June 2021, Sasol Investment Company (Pty) Ltd concluded a share sale and purchase agreement pursuant to which the buyer agreed to acquire all of the shares of Sasol Canada Holdings Limited (SCHL) and Sasol Canada Exploration and Production Limited (SCEPL). SCHL and SCEPL collectively own the partnership units of Sasol Canada Exploration and Production Limited Partnership, which holds a 50% general partnership interest in the Petronas Sasol Montney Partnership and a 50% undivided working interest in certain associated midstream assets. The transaction was subject to a number of conditions precedent.
Effective 1 March 2022, Sasol sold its German subsidiary, Sasol Wax GmbH, including the company's production facilities in Hamburg, Germany, the U.K., and Austria, to the Italian Awax Group. With the transaction, Sasol transferred its entire European wax business, except for the Fischer-Tropsch hard wax business, which remained with Sasol.
Subsidiaries
Sasol South Africa Limited, a subsidiary of the company and a company incorporated in South Africa, primarily holds its operations located in South Africa. A number of other subsidiaries incorporated in South Africa, including Sasol Oil (Pty) Ltd, Sasol Mining Holdings (Pty) Ltd, Sasol Gas (Pty) Ltd, Sasol Middle East and India (Pty) Ltd, and Sasol Africa (Pty) Ltd, also hold the company’s interests in operations in South Africa, other parts of Africa, and the Middle East. Sasol Financing Limited and Sasol Financing International Limited, responsible for the management of cash resources and investments and, are wholly owned and incorporated in South Africa.
The company’s wholly owned subsidiary, Sasol Investment Company (Pty) Ltd, a company incorporated in South Africa, primarily holds its interests in Sasol group companies incorporated outside of South Africa, including Sasol European Holdings Limited (the United Kingdom), Sasol (USA) Corporation (the United States), Sasol Holdings (Asia Pacific) (Pty) Ltd (South Africa), Sasol Holdings (USA) (Pty) Ltd (South Africa), Sasol Chemical Holdings International (Pty) Ltd (South Africa), and their respective subsidiaries.
Energy Business
Mining
Coal Mining Facilities
The company’s main coal mining facilities are located at the Secunda Mining Complex, which consists of underground collieries (Bosjesspruit; Impumelelo; Shondoni; Syferfontein; and Twistdraai Thubelisha) and the Sigma complex consisting of the Mooikraal colliery near Sasolburg.
The company’s Mining segment operates six mines for the supply of coal to the Secunda operations, Sasolburg and Ekandustria operations (utility coal only) and the external market.
Processing Operations
Coal Export Business—Secunda Operations: The company engages in coal export business. Run of mine (ROM) coal is sourced from Twistdraai/Thubelisha Colliery (nominated capacity 8,4 Million tons (Mt)). The export beneficiation plant has a design throughput total capacity of 10,5 Mt per annum. In 2022, the company produced 7,3 Mt from Twistdraai/ Thubelisha Colliery; of which the company beneficiated 6,9 Mt, and 0,873 Mt was bypassed to Sasol Coal Supply.
The run of mine (ROM) coal is transported via an overland conveyor belt to the export beneficiation plant from the Twistdraai Thubelisha Colliery. The export product is loaded onto trains by means of a rapid load-out system, and then transported to the Richards Bay Coal Terminal (RBCT) in KwaZulu-Natal.
Sasol Mining (Pty) Ltd (Sasol Mining) has a 4,2% shareholding in RBCT and Sasol Mining’s entitlement on an 81 Mt per year RBCT capacity is 4,29%, which translates to 3,47 Mt per year. Actual export volumes for 2022 of 2,3 Mt per year were significantly constrained by Transnet Fright Rail’s projected capacity.
Sasol Coal Supply—Secunda Operations: Sasol Coal Supply operates the coal handling facility between the company’s Mining segment and Secunda operations by stacking and blending coal on six live stockpiles. The overland conveyors from the mining operations to the coal handling facility are, in total, approximately 120 kilometres (km) long and also form part of the Sasol Coal Supply operation.
The operation has a live stockpile capacity of 720 000 tons, which is turned over around 1,2 times per week. In addition, there is a targeted strategic stockpile capacity of more than 2,0 Mt. The objectives of this facility are to homogenise the coal quality supplied to Secunda operations; to keep mine bunkers empty; to keep the Secunda operations bunkers full of a product that conforms to customer requirements; to supply quality coal within the parameters of ash, sinks and fines; to maintain a buffer stockpile to ensure even supply; and to perform a reconciliation of business with regard to quantity and quality.
The daily coal supply to Secunda operations is approximately 100 000 tons for 2022.
Coal Exploration Techniques
Core Recovery Exploration Drilling: This is the primary exploration technique that is applied in all exploration areas, especially during reconnaissance phases. In and around operational mines, the average vertical borehole density varies from 1:10 to 1:15 (boreholes per hectare), while in medium-term mining areas, the average borehole density is in the order of 1:25. Depths of the boreholes drilled vary, depending on the depth to the Pre-Karoo basement, from 160 metres (m) to 380 m. The major application of this technique is to locate the coal horizons, to determine coal quality and to gather structural information about dolerite dykes and sills, and the associated de-volatilisation and displacement of coal reserves. This information is used to compile geological models and forms the basis of geological interpretation.
Directional Drilling: Directional drilling from surface to in-seam has been successfully applied for several years. A circular area with a radius of approximately 1,4 km of coal deposit can be covered by this method from one drill site. The main objective of this approach is to locate dolerite dykes and transgressive dolerite sills, as well as faults with displacements larger than the coal seam thickness.
Secunda Operations
The coal supplied to Secunda operations is the raw coal mined from the four mines supplying Secunda operations exclusively and the secondary product from the export beneficiation plant.
The company has carried out extensive geological exploration in the coal resource areas, and undertake additional exploration to update and refine the geological models. This allows for accurate forecasting of geological conditions and coal qualities, and also effective planning and utilisation of coal reserves.
Reserve Estimation (Remaining Reserves as of March 31, 2022)
The company has approximately 3,9 billion tons (Bt) of gross in situ proved and probable coal reserves in the Secunda Deposit and approximately 1,2 Bt of recoverable reserves.
Gas
The company’s natural oil and gas operations are managed by Gas Sourcing and Operations (GSO) as part of the Gas segment of its Energy Business. As of June 30, 2022, the company held equity in two assets with proved reserves in Mozambique, one producing asset and one non-producing asset. The company also has equity in exploration licences in Mozambique and South Africa.
Mozambique
Licence Terms
Development and Production
In Mozambique, the company has interests in two onshore assets, one of which is producing with proved reserves.
The producing asset is the Pande-Temane Petroleum Production Agreement (PPA) licence (301,1 thousand developed net acres). The company’s subsidiary, Sasol Petroleum Temane Limitada (SPT), the operator, holds a 70% working interest in the PPA. The PPA expires in 2034 and carries two possible five-year extensions. There is no requirement to relinquish any acreage until the expiry of the PPA.
The asset under development is the Production Sharing Agreement (PSA) licence (443,4 thousand undeveloped net acres) where the company is developing oil and gas reservoirs contained in the Pande, Temane and Inhassoro fields. The company’s subsidiary Sasol Petroleum Mozambique Limitada (SPM), the operator, holds a 100% working interest. Under the terms of the PSA licence, Empresa Nacional de Hidrocarbonetos (ENH) as the licence holder is entitled to a profit share of production.
Exploration
The company has interests in one offshore exploration licence, Angoche A5-A (non-operated) and one operated onshore licence PT5-C.
The onshore block PT5-C in the Pande Temane Area covers 521,0 thousand undeveloped net acres. The company’s subsidiary, Sasol Mozambique PT5-C (SMPT5-C), holds a 70% working interest, as operator, and ENH holds a 30% interest, carried through the exploration period. Block A5-A in the offshore Angoche Area originally covered an area of 290,5 thousand undeveloped net acres. The company’s subsidiary, Sasol Mozambique A5-A (SMA5-A) held a 25.5% participating interest in the licence, which is operated by Eni Mozambico S.p.A. During January 2022, a farm down agreement was signed whereby SMA5-A would farm out a 15.5% participating interest to Eni Mozambico S.p.A. The transaction reached its closing date on 27 July 2022 after all conditions precedent were met.
Activities
In terms of the PSA, following approval of the Field Development Plan Amendment (FDP) amendment in September 2020 and the Final Investment Decision (FID) in February 2021, work to deliver the field development scope (oil and gas wells and gathering system and integrated gas, oil and LPG processing facilities) has commenced. The 3-D seismic data acquisition and processing over the Pande and Inhassoro fields has been concluded.
Facilities and Productive Wells
As of June 30, 2022, there were 19 productive wells in the Pande-Temane PPA asset.
Delivery Commitments
PPA condensate is sold to Petróleos de Moçambique, S.A. (Petromoc), which transports the condensate by truck from the CPF for export. The contract was recently extended until 30 June 2024.
Changes to Proved Reserves
There was an increase of 284 billion cubic feet in proved gas reserves to 814 billion cubic feet due to a 229 billion cubic feet upward revision of previous estimates, and discoveries of 166 billion cubic feet related to the PSA asset, partially offset by production of 111 billion cubic feet.
Changes to Proved Developed Reserves
Proved developed gas reserves increased by 176 billion cubic feet to 599 billion cubic feet. The increase was due to an upward revision of the previous estimates by 287 billion cubic feet partially offset by production of 111 billion cubic feet.
South Africa
Licence Terms
In South Africa, the company has an interest in one exploration licence.
The company’s subsidiary, Sasol Africa (Pty) Ltd, holds a 100% working interest (13 758,1 thousand undeveloped net acres) in the ER236 licence, offshore in the Durban Basin. Eni’s equity and operatorship were transferred to Sasol following a decision by Eni South Africa BV not to enter the Third Exploration Period. A decision is pending from the Petroleum Agency of South Africa (PASA) on Sasol’s application to enter the Third Exploration Period.
Transportation Capacity
During 2021, a sale and purchase agreement was concluded in terms of which Sasol agreed to dispose of a 30% interest in ROMPCO. On 27 June 2021, two of the existing shareholders, the South African Gas Development Company Limited (iGas) and Companhia Moçambicana de Gasoduto S.A.R.L. (CMG), exercised their pre-emptive right to acquire 30% of the company’s equity in ROMPCO. The transaction reached completion date on 29 June 2022, the date at which all conditions precedent were fulfilled. Sasol retains a 20% interest in ROMPCO and will continue to operate and maintain the pipeline in terms of the commercial agreement between Sasol and ROMPCO, which is independent of the transaction. Sasol's agreements with ROMPCO to transport gas to Secunda are unaffected by the transaction and the tariffs remain as per the said agreements, which were approved by the National Energy Regulator of South Africa (NERSA).
CTRG is a 175MW gas-to-power generation facility, located at Ressano Garcia, Mozambique. A Sale Securities Purchase Agreement was signed with Azura Power Limited on 20 December 2020 for the divestment of the company’s full shareholding in CTRG. The transaction reached completion effective on 29 April 2022 following the fulfilment of all conditions precedent.
Fuels—Plants and facilities
Facilities in South Africa
The company’s main manufacturing facilities are located at Secunda Operations. Additionally, the Natref refinery, based in Sasolburg, is approximately 2 km2.
Interests in Facilities in Qatar
The company has interest in ORYX GTL, which is a gas-to-liquids plant, located at Ras Laffan Industrial City, situated along the northeast coast of Qatar.
Secunda Operations
Synthetic Oil
The size of Sasol’s total Secunda property is approximately 79 square kilometers (km2) with operating plants accounting for 8 km2. This forms the base for the main manufacturing facilities for the company’s Energy and African Chemicals businesses.
Chemicals – Plants and facilities
Facilities in South Africa
The company’s main manufacturing facilities are located in Secunda and Sasolburg. The size of Sasol’s total Secunda property is approximately 79 km2 with operating plants accounting for 8 km2. Within the Secunda property, a portion of the explosives assets are owned and operated by Enaex Africa in association with Sasol from the 1 July 2020. The size of the Sasolburg property is approximately 51 km2.
Facilities in the United States
The company’s operation in Lake Charles, Louisiana is its single biggest site in the U.S. with a full size of approximately 6 km2. Within the Lake Charles site, the ethylene cracker on the west side, the linear low-density polyethylene (LLDPE) and the LDPE plants are owned and operated by the company’s 50% owned LIP JV.
Further operation sites in the United States are located in Winnie and Greens Bayou in Texas, and Tucson, Arizona.
Facilities in Eurasia
The company’s German operations are based at two locations, namely Brunsbüttel (site size approximately 2 million m2; plant size 500 000 m2) and Marl (site size approximately 160 000 m2; plant size 75 000 m2).
The operations in Italy are based at three locations. The primary facilities are at Augusta (site size approximately 1,36 million m2; plant size 510 000 m2) on the island of Sicily and Terranova (site size approximately 330 000 m2; plant size 160 000 m2) with a smaller site at Sarroch on the island of Sardinia.
The operations in China are based at two locations in Nanjing (Fangshui site size approximately 90 000 m2; plant size 4 000 m2; Zhaoqiaohe site size approximately 143 000 m2; plant size 3 600 m2).
Smaller operations can be found at the site Novaky in Slovakia.
Regulation
The company is aligned with the economic transformation and sustainable development objectives embodied in the South African legislative and regulatory framework governing Broad-Based Black Economic Empowerment (B-BBEE). The key elements of this framework are the B-BBEE Act and the Codes of Good Practice (the new Codes were gazetted on 11 October 2013 and promulgated on 1 May2015 and further amended during May2019) for B-BBEE issued by the Minister of Trade and Industry in terms of the B-BBEE Act (Codes), as well as the Charters (i.e. the Mining Charter) and Liquid Fuels Charter (LFC) adopted by the various sectors within which Sasol operates businesses and the related scorecards.
Sasol Mining is the holder of mining rights in terms of Mineral and Petroleum Resources Development Act, 2002 (Act 28 of 2002), as amended (MPRDA), in the respect of its operations in the Mpumalanga and Free State provinces in South Africa.
History
Sasol Limited was founded in 1950. The company was incorporated under the laws of the Republic of South Africa in 1979.
