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Hanwha bids for 50% stake in coronavirus-hit Sasol’s chemical plant in US

(Hanwha Total)
(Hanwha Total)

Hanwha Solutions has submitted a bid for 50 percent stake in the ethane cracking center at Sasol’s Lake Charles complex in Louisiana, according to industry sources Tuesday.

The South African energy producer seeks to liquidate its assets to mitigate the liquidity crisis amid an unprecedented demand crunch in the global oil market.

Hanwha Solutions refused to confirm the plan, although it admitted that the current market conditions are favorable time for such a purchase.

“The plunge in oil prices has brought financial strain to shale gas companies, which is why Sasol is selling its stake in the ECC,” the company official said.

ECCs have an advantage when oil prices are high because they use ethane extracted from shale gas to make ethylene, a basic raw material in the petrochemical industry. However, when oil prices are low, naphtha cracking centers have an advantage as they use the hydrocarbon mixture extracted from oil to make ethylene.

The acquisition is estimated to cost between 2 trillion won ($1.7 billion) and 4 trillion won, according to industry sources.

By Kim Byung-wook (