Slide 1: Sasol Site Visit, Lake Charles
Sasol Site Visit Lake Charles, La. February 2, 2015
Slide 2: Welcome and overview
Welcome and overview Steve Cornell Executive Vice President International Operations
Slide 3: Safety moment – Evacuation routes
Safety moment – Evacuation routes 3 Copyright ©, 2015, Sasol
Slide 4: Forward-looking Statements
Forward-looking Statements Sasol may, in this presentation, make certain statements that are not historical facts and relate to analyses and other information which are based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to our future
Slide 5: What we will cover today
What we will cover today Topic Presenter Steve Cornell Welcome and overview Executive Vice President International Operations Mike Thomas Existing Lake Charles operations Senior Vice President US Operations Steve Cornell Ethane cracker and derivatives complex Executive Vice President International O
Slide 6: Group imperatives
Our strategic agenda continues to guide our near-to medium-term strategy Nurture and grow Expand and deliver Foundation Sustainable growth Definition of victory Develop and empower Operations Grow shareholder high-performing, Accelerate GTL growth Excellence value sustainably values-driven people Gr
Slide 7: Our investment criteria underpin a sound business case
Our investment criteria underpin a sound business case Do we have a technology, scale of plant or operating Technology know-how that provides a competitive advantage? Feedstock Do we have a leading low-cost feedstock? Robust Do we have a product or market position that provides us Market project wit
Slide 8: Our balanced portfolio provides scale and diversification
Our balanced portfolio provides scale and diversification • Integrated multi-asset site: fixed cost spread, infrastructure for the future • New world-scale ethane cracker • Six derivative units • Development of Lake Charles extended area • Differentiation: capacity expansion and new capabilities to
Slide 9: Existing operations
Existing operations Mike Thomas Senior Vice President US Operations
Slide 10: Existing operations
Existing operations • Excellent operational track record • Access to robust infrastructure • Positive stakeholder relations 10 Copyright ©, 2015, Sasol
Slide 11: North American Operations overview and history
North American Operations overview and history • Lake Charles site originated in 1961 as the Petrochemical Division of Conoco, later renamed Conoco Chemicals • Acquired by Du Pont in 1982 • MBO formed Vista in 1984 (2 000 employees) • Acquired by RWE-DEA in 1991 (1 900 employees) • PVC business sold
Slide 12: North American Operations sites
North American Operations sites 12 Copyright ©, 2015, Sasol
Slide 13: North American Operations priorities
North American Operations priorities Safety and Reliability and plant Cost/profitability environmental operations improvement focus excellence 13 Copyright ©, 2015, Sasol
Slide 14: North American recordable injury rate
North American recordable injury rate NA Operations recordable case rate 0,8 0,7 0,6 0,5 0,4 0,3 0,2 0,1 0.11 0,0 Nov Dec Nov Dec Nov Dec Mar May Mar May Jan Jun Jan Jun Jul Jul Jul Feb Feb Aug Sep Apr Aug Sep Apr Aug Sep Oct Oct Oct 2012 2013 2014 1st quartile Chemical mfgr median Chem mfgr 1st qua
Slide 15: Thriving Downstream and Petrochemicals hub
Thriving Downstream and Petrochemicals hub Entergy NISCO Georgia Gulf City of MG Industries Westlake Air Products Phillips 66 Refinery EXCEL Paralubes Biolab City of Sulphur Arch City of Lake Charles PPG Certainteed Firestone Basell Air Liquide Louisiana Pigment Westlake Petrochem Citgo Refinery Tar
Slide 16: Robust transportation infrastructure
Robust transportation infrastructure Barge and marine Railroad Port of Lake Charles Access to three rail lines: • 13th-busiest in the U.S. • KCS Port of Houston • Union Pacific • Approximately 100 miles • BNSF Road Pipeline Lake Charles Major East-West, coast-to-coast Well-supplied with pipeline int
Slide 17: Lake Charles operations
Lake Charles operations Alumina 17 Copyright ©, 2015, Sasol
Slide 18: Lake Charles site production history
Lake Charles site production history 1 200 Global Production volume (ktpa) Hurricane economic Rita downturn 1 000 800 600 400 200 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 More than 50 years of production history Steadily higher volume
Slide 19: Our footprint in Lake Charles
Our footprint in Lake Charles 19 Copyright ©, 2015, Sasol
Slide 20: Sasol: reaching new frontiers
e? ozo SASOL reaching new frontiers
Slide 21: Ethane cracker & derivatives complex
Ethane cracker & derivatives complex Steve Cornell Executive Vice President International Operations
Slide 22: Balanced portfolio leveraging existing product lines
Balanced portfolio leveraging existing product lines MEG Ethylene To existing ETO oxide/MEG Ethoxylates ETO Guerbet Ziegler Guerbet alcohols Ethane Ethylene Ethane Ziegler alcohol cracker Alumina LLDPE LLDPE LDPE LDPE Ethylene to Gemini joint venture (HDPE) Existing cracker Merchant ethylene ethylen
Slide 23: Significantly increasing our Lake Charles production capacity
Significantly increasing our Lake Charles production capacity 2 400 Production volume (ktpa) 2 000 1 600 1 200 800 400 0 Ethylene Polyethylene Alcohols and ethoxylates* Alkylates Existing LCCP * Includes MEG and Alumina 23 Copyright ©, 2015, Sasol
Slide 24: Access to proven technologies and deep operating know-how
Access to proven technologies and deep operating know-how Production unit Technology licensor Operating know-how Ethylene cracker 45 years in USA, RSA Low density polyethylene 45 years in RSA, Petlin Malaysia Linear low density polyethylene 30 years in RSA Ethylene-oxide/ethylene glycol 20 years Ger
Slide 25: Low-cost feedstock secured
Low-cost feedstock secured Ethane feedstock supply • 70% of ethane supply secured from reliable industry leaders • Competitive, reliable ethane Un-contracted/Spot transportation capacity secured 3 - 5 years • Ethane storage capacity OPIS linked in Sulphur and Mt Belvieu to mitigate exposure to Aegis
Slide 26: Ethane pricing
Ethane pricing • Shale revolution yields tremendous natural gas liquids growth • Ethane price essentially driven by natural gas price • Ethane price relative to energy value determined by supply/demand, with a ceiling price determined by the next best ethane cracking feedstock (expected to be propan
Slide 27: Fortuitous timing – a robust long-term outlook
Fortuitous timing – a robust long-term outlook, advantaged by near-term developments Long-run Brent crude oil projections (2014$/bbl) 175 Construction phase | Operation phase | 2015-2017 2018 onwards 150 + Lower USGC cost escalation + US ethane enhances its advantage versus naphtha 125 + Project del
Slide 28: Schedule and Manpower
Schedule and Manpower 2014 2015 2016 2017 2018 Engineering FEED Detail eng. Procurement Long leads Equipment & Bulks Site Construction Site Prep / Civil / Module / Direct Field Operations Unit Start-ups 6 000 5 000 Workers at site 4 000 3 000 2 000 1 000 0 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 J
Slide 29: Contracting strategy
Contracting strategy Partner Role IPMT EPCM, ethane cracker, Ziegler alcohol unit, utilities LLPDE, EO/EG EPFCs • Mix of reimbursable EPC for high pressure portion of LDPE unit and lump-sum contracts Main automation consultant • World-class roster of contractors Contractor Role • Strong track record
Slide 30: Capability
Capability Experienced owner team in place to oversee Execution phase • Owner team boosted by personnel experienced in: • Mega Projects in the USA • Mega Projects within Sasol • Managing and working with large Engineering contractors, globally • Effective, flexible partnership with WorleyParsons con
Slide 31: Sasol: reaching new frontiers
e? ozo SASOL reaching new frontiers
Slide 32: Break
Break
Slide 33: Chemicals strategy, products and markets
Chemicals strategy, products and markets Fleetwood Grobler Executive Vice President Chemicals Business
Slide 34: Sasol chemicals strategy
Sasol chemicals strategy Sustainably Performance Profitable grow Robust portfolio drive growth shareholder value (TSR) 34 Copyright ©, 2015, Sasol
Slide 35: A robust portfolio of base and performance chemicals
Sasol’s chemical business: A robust portfolio of base and performance chemicals Base Chemicals Performance Chemicals A producer and marketer of A producer and marketer of commodity chemicals based on the commoditised and differentiated performance chemicals FT, C2, propylene and ammonia value chains
Slide 36: Product diversification improves stability of cash flows
Product diversification improves stability of cash flows in times of commodity price volatility Normalised uplift - over ethane 1994 1997 2000 2003 2006 2009 2012 Performance Chemicals Base Chemicals 36 Copyright ©, 2015, Sasol
Slide 37: Base Chemicals overview
Base Chemicals overview Global PE shortfall by 2020 20 • Polyethylene pellets sold Capacity surplus [mtpa] Sasol US PE to converters who produce plants film and other plastic forms 10 start-up used in a wide range of applications 0 • Global PE demand to grow from 81 mtpa in 2013 -10 to 102 mtpa in 2
Slide 38: Base Chemicals overview
Base Chemicals overview • Sasol has an established brand name in global polymers marketing and sales • 50 years of experience in PE market • Will use existing sales channels and develop new ones • Sasol marketed through distributors in most parts of the world; own sales force in Sub-Saharan Africa a
Slide 39: Sasol plants top quartile for capacity in North America
Sasol plants top quartile for capacity in North America 2020 LLDPE North American plant 2020 LDPE North American plant 2020 HDPE North American plant capacity forecast (ktpa) capacity forecast (ktpa) capacity forecast (ktpa) 700 450 500 Single line capacities Single line capacities Single line capac
Slide 40: Performance Chemicals overview
Performance Chemicals overview • Sold into 50+ diversified markets including detergents, cosmetics and personal care products, pharmaceuticals, lubricants and other industrial solvents, products to enhance oil recovery, inks and paints, polyester fibers and resins, antifreeze • The majority marketed
Slide 41: Only integrated producer of alcohols, alkylates, and surfactants
Sasol Performance Chemicals the only integrated producer of alcohols, alkylates, and surfactants Alkyl Phenol Ethoxylates Sulfonates/ N-Paraffins Oxide (EO) AS & AES Alkylates/ LAS/SAS Ethylene Ethylene Alcohols Sulfates LAB Material type Manufacturers Feedstock Intermediates Surfactants Feedstock I
Slide 42: Diversified in product slate and geographic sales and marketing channels
Diversified in product slate and geographic sales and marketing channels Base Chemicals project sales, Performance Chemicals project sales, steady state steady state Latin America Europe Asia Europe Latin America US ROW Asia US 42 Copyright ©, 2015, Sasol
Slide 43: Sasol: reaching new frontiers
e? ozo SASOL reaching new frontiers
Slide 44: Financing
Financing Paul Victor Chief Financial Officer (Acting)
Slide 45: Financing
Financing • Approximately 80% funds in place through a combination of project finance and equity • US$4 billion project finance facility completed • 7 year final maturity, partially amortising • Secured by the project company assets • Supported by a Sasol Limited completion guarantee • Product Offta
Slide 46: LCCP funding plan
LCCP funding plan Financing Uses of funds US$ billion Capital cost – LCCP 8,9 Working capital changes (including interest) 2,5 Total uses of funds 11,4 Sources of funds US$ billion Debt 7,0 Bank term loan US$4 billion Incremental funding US$3 billion Equity draw 4,4 Total sources of funds 11,4 • Str
Slide 47: Credit facility in place, supported by international banks
Credit facility in place, supported by a range of large international banks Financing • US$4 billion credit facility closed in December 2014 • Typical European/Middle Eastern style Project Finance with completion support, with a 7 year partially amortising term • Priced at spread over US$ Libor, swa
Slide 48: Project capex cash flow profile
Project capex cash flow profile Financing 100% 80% 60% 40% 20% 0% FY14 FY15 FY16 Beneficial operation FY18 48 Copyright ©, 2015, Sasol
Slide 49: Project economics robust, even under extreme scenarios
Project economics robust, even under extreme scenarios Financing Sasol US$ WACC: Project IRR > 8% Sasol US hurdle rate Sasol price set US$80/bbl (real) long-term Ethane Ethane Ethane pricing at ceiling at floor Capital (EOJ) +15% -10% 6 month delay + Start-up delay % capex increase 49 Copyright ©, 2
Slide 50: Sasol: reaching new frontiers
e? ozo SASOL reaching new frontiers
Slide 51: Conclusion
Conclusion Steve Cornell Executive Vice President International Operations
Slide 52: Meeting all Sasol's criteria for successful investments
Meeting all Sasol’s criteria for successful investments Technology Do we have a technology, scale of plant or operating know- how that provides a competitive advantage? Feedstock Do we have a leading low-cost feedstock? Robust Do we have a product or market position that provides us with Market
Slide 53: Sasol Site Visit
Sasol Site Visit Lake Charles, La. February 2, 2015