When Harvey met Charles: Sasol counts cost of heavy hurricane season
Hurricane Harvey and two other hurricanes on the US Gulf Coast pushed up the cost of Sasol’s Lake Charles Chemicals Project to $11.13bn, president and joint CEO Steve Cornell said on Thursday. Sasol shocked investors in August 2016 when it raised the cost of the ethane cracker and chemicals complex under construction in Louisiana to $11bn, including a contingency, from $9bn previously. Investors were told Sasol was confident that $11bn would be the final cost. In August, however, Texas and Louisiana, which are known for regular hurricanes, were hit by exceptionally strong events. Hurricane Harvey alone was estimated to have caused $180bn-200bn in damage. Cornell said the contingency was never intended to cover one-off events but was for price escalations in equipment or labour, in equipment under construction off site, productivity falling below projections or errors in estimates. There was still a contingency in place for those possibilities, which was considered sufficient to comp...
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