Sasol annual report 2007 - Operational review 15/16

Operational

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	Operational
	South African energy cluster
	International energy cluster
	Chemical cluster
	Other businesses

Operational review (continued) Pages | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 |

Other businesses

Sasol Technology

•	68 projects worth R3,4 billion reach ready-for-operation stage.
•	Staff complement up a quarter and investment in education bolstered.
•	Larger scale piloting of our ethylene tetramerisation technology progressed.

Keeping Sasol sustainable

Sasol Technology continues to strategically position the group’s technology to realise future opportunities in a sustainable way. In a demanding global environment with engineering and construction resources in short supply, Sasol Technology achieved some notable successes. These included reaching various project milestones, enhancing our technical capacity and deepening our scientific experience at home and abroad.

In the year Sasol spent R12 billion on major capital projects – around R7 billion of this was on growth projects and the rest on enhancing existing facilities. Sasol Technology was intimately involved in all these projects and is pleased to report that 68 projects worth R3,4 billion reached ready-for-operation stage. Included in this portfolio were significant modules of Project Turbo, Oryx and the Natref clean fuels initiative.

With people being our most important competitive advantage, we grew our overall staff complement by some 25% in the year and our research and development headcount at Sasolburg by over 10%.

To enhance national competence in chemistry and chemical engineering, we increased our investment in education. Over the next eight years we will invest nearly R250 million to strengthen teaching and research capacity in these fields at selected South African universities. We continued to foster strategic alliances with international research institutions, establishing advisory boards in analytical technology, coal gasification, and fuels research.

Innovations to reduce the impact of our businesses on the environment remain a major priority for Sasol Technology. We continue to drive the optimisation of current processes, focusing on energy efficiency, emissions and water utilisation. Renewable and alternative fuels are also becoming more important to sustainable competitive strategies and, among other things, we are investigating biofuels as a possible fuel blend stock.

Building sustainable proficiency

At the start of 2007 we embarked on a focused strategy to reposition Sasol Technology for sustainable proficiency. As part of this intervention we are reviewing leadership effectiveness, organisational design and certain business management processes.

We put added effort into improving our management of strategic technology, particularly in acquiring and directing technology solutions for new and existing ventures. To this end, we established a dedicated Sasol Technology licensing group.

Another important focus area is the operations profitability improvement group, tasked with realising the full potential and profitability of existing production technologies. Innovating to optimise group assets and secure Sasol’s sustainable competitive advantages is an integral part of Sasol Technology’s function.

Meeting complex challenges

In the year we faced the challenge of integrating seamlessly the many facets of Project Turbo’s implementation, while continuing to meet final product specifications and with minimal disruption to other processes.

We faced difficulties in project delivery and optimising newly installed technology. Most notable were the delays in the rampup of the Oryx gas-to-liquids (GTL) project in Qatar and the selective catalytic cracker (SCC) at Secunda.

We are confident in our highly skilled team of scientists and engineers who continue to work tirelessly to implement modifications to resolve these challenges at the earliest opportunity. They have proven their ability over many years to innovate and work thoroughly and methodically to solve complex problems in making new technologies commercially viable.

Enhancing our proprietary technology advantage

We continue to enhance Sasol’s proprietary Fischer-Tropsch (FT) technology. We have advanced programmes to improve the Sasol Slurry Phase Distillate™process that converts gas to liquid fuels. Improvements include developing new-generation catalysts, regenerating existing catalysts and finding more cost-effective ways to generate synthesis gas.

Our research and development team enhanced our catalysttesting proficiency by increasing our small-scale testing capabilities and installing two pilot slurry reactors. We are in the process of commissioning a new 500 barrels-a-day FT demonstration unit at Sasolburg, which will help us develop the new generation of FT GTL reactors.

Sasol Technology is also driving a project aimed at expanding capacity to produce proprietary cobalt-based FT catalyst at De Meern in The Netherlands by early 2008.

“Innovations to reduce the impact of our businesses on the environment remain amajor priority for Sasol Technology.”

Accelerating growth sustainably

We continue to make progress on the larger scale piloting of our patented ethylene tetramerisation technology to produce 1-octene. We are currently focusing on resolving challenges associated with the scaling-up of this project. Despite the demanding and volatile environment, construction of the third 1-octene plant in Secunda is progressing steadily.

Engineering is advanced on the group’s second methyl iso-butyl ketone plant at Sasolburg. We continue to investigate other chemical expansion opportunities based on both GTL and coal-to-liquids (CTL) technologies.

Besides our focus on commissioning Oryx GTL and solving the technical deviations identified during start-up, we also remain focused on enabling the construction of the Escravos GTL plant in Nigeria. We also did extensive studies for new GTL ventures under consideration.

Sasol Technology increased support to Sasol’s CTL ambitions in the year, evaluating coal suitability and potential plant designs at various sites in South Africa and abroad. Developing advanced catalysts is a key to success, so we launched a specific research programme focused on iron-based catalysis. We also began early studies on Project Mafutha, the new greenfields CTL plant being considered in South Africa in partnership with the South African Government.

A major challenge in CTL is its environmental footprint. We have stepped up research on reducing emissions from CTL plants, improving plant efficiencies and carbon dioxide (CO2) capturing and storage alternatives. Whereas the challenge is to model, monitor and verify the behaviour of CO2 throughout the capture and sequestration process, a considerable existing global knowledge base facilitates our investigations. Our efforts include the potential to substitute carbon-derived process energy with alternative energy, such as nuclear power.

Advancing fuels research

Our commitment to excellence in research is evident in the multimillion rand investment by our fuels research group in an applied sea-level engine testing and research facility in Cape Town. Because of the increasing importance of vehicle emissions research, a heavyduty emissions facility will form part of this investment.

As airline travel grows, global demand for a secure supply of jet fuel is becoming more critical. In the year we completed tests to produce fully synthetic jet fuel from the Sasol Synfuels plant. We are awaiting final approval from the international specification authorities for its use. We are also working on obtaining approvals for synthetic jet fuel we could produce in GTL and CTL plants outside South Africa.

In the year we established an alliance with European aircraft manufacturer Airbus to study new jet fuels, and are participating in the European Union-funded alternative jet fuel research consortium Alpha-Bird.

Cynthia Toekie Sekgobela,
senior accountant,
Sasol Technology, Sasolburg.

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