South Africa: Sasol expands its horizons
Despite its market capitalisation of $32.5bn and world-leading position in making liquid fuel from coal and gas, Sasol is little-known outside its South African home turf. Yet it is eyeing growth opportunities all over the world, says Pat Davies, chief executive, in a rare interview in Tuesday’s FT.
Top of Sasol’s list is a plan to acquire a 50 per cent share in an $8.8bn coal-to-liquids project in China, currently awaiting regulatory approval. That will be the “largest single-project foreign direct investment” in the country, Sasol says.
But some analysts are questioning why Sasol is making such a big investment in coal, given that the gas-to-liquids technology is greener and more efficient. Davies acknowledges that argument – indeed, Sasol recently invested $2.1bn in two shale gas fields in Canada, and is considering further gas investments in countries ranging from Australia to Uzbekistan.
Davies’ drive to acquire these assets is given added urgency by his belief that natural gas prices are set to rise – a statement that will be noted by those who follow the commodity, which remains far below the prices it reached before the financial crisis.
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