committed to Southern A new era for Sasol

Transcription

1 committed to Southern Africa s advancement A new era for Sasol

2 As a large corporation, we serve a higher purpose than just running our businesses profitably. At Sasol, we seek to play a constructive role as a transformative employer of choice and, more broadly, as an active corporate citizen. South Africa is the cornerstone of our global operations, and we see large-scale stakeholder benefit in our ongoing investment in the growth and development of the country and the region. David E Constable President and Chief Executive Officer Sasol Limited November 2014

3 A product of South Africa s success Throughout our 64-year history, Sasol has played an important role in South Africa and the broader region s industrialisation, growth and socio-economic development. South Africa is a place that Sasol proudly calls home. Having extensively reviewed our longer term aspirations, we are clear that our contributions will be sustained for decades to come through our nurture and grow strategy. Through this strategy, we will continue to maintain and enhance our existing asset base and explore new opportunities for growth on the African continent. Underpinning our strategy are several key initiatives collectively known as Project 2050 aimed at sustaining and expanding our integrated value chain in Southern Africa to the middle of the century. Our nurture and grow strategy, underscored by our 2050 ambitions, is aligned to and supportive of the South African government s New Growth Path and Vision 2030, as espoused in the National Development Plan. Over the years, Sasol s unique technologies have made us the world s largest producer of synthetic fuels and chemicals from coal and natural gas. Our expertise in commercialising technologies that beneficiate resources, including natural gas, to produce much-needed liquid fuels, high-value chemicals and low-carbon electricity, serve to promote regional growth, development and stability. This booklet highlights a few of our key investments, initiatives and projects in support of our commitment to Southern Africa s advancement. 1

4 During the past three annual maintenance shutdowns at our Synfuels plant in Secunda, an average of additional employment opportunities were created each year. Through our retail network of 373 Sasol service stations across South Africa, we indirectly employ more than people. Between February 2009 and June 2014, during the construction periods of our various megaprojects in Sasolburg, we created over employment opportunities. 2

5 Ensuring continued security of supply Extending our Southern African businesses to 2050 signals Sasol s unwavering commitment to the region. Towards this end, Sasol invests billions of rands in the local economy, contributing to both job creation and security of supply in liquid fuels, chemicals and low-carbon electricity. During the 2014 financial year, our in-country spend was R22 billion, which equates to 57% of the group s total spend. For the last three years, we invested R60 billion locally on capital investments. We were recently awarded an extension of our Secunda mining rights to 2040 and the next two phases of our R14 billion mine replacement project in Secunda are on track. This programme is critical to replace much needed large-scale coal reserves for the long-term sustainability of our operations and the lifespan extension of our Southern Africa integrated value chain to The first phase, the R3,5 billion Thubelisha Shaft at Twistdraai Colliery, was inaugurated in The project sustained jobs at the mine and more than workers were on site at the peak of construction. Our R14 billion Synfuels growth programme in Secunda, due to be completed at the end of 2014, will increase production by 3,2% off a 7,3 million ton baseline, ensuring ongoing security of supply. David Constable, Sasol s President and Chief Executive Officer, with former Minister of Mineral Resources, Susan Shabangu at the inauguration of the Thubelisha Shaft, Twistdraai Colliery, Secunda, in

6 Sasol s Ethylene Purification Unit 5 in Sasolburg was already in operational phase during January

7 We are currently investing R13 billion in expanding our hard wax production facilities in Sasolburg. Hard wax is used by several major industries and applications include adhesives, printing ink and bitumen used in road construction. Our R1 billion state-of-the-art limestone ammonium nitrate (LAN) granulation plant was inaugurated in The plant has a production capacity of tons per annum, and was designed to improve the quality of LAN fertiliser granules using the latest energy efficiency and waste minimisation technologies. Sasol s supply of nitrogen products meets more than 25% of South Africa s nitrogen fertiliser demand. Earlier this year, we inaugurated our new Ethylene Purification Unit (EPU5), in Sasolburg. This is a R1,9 billion investment in our ethylene production that will address the local plastics industry s growing demand for polyethylene. Minister of Trade and Industry, Rob Davies with Sasol s President and Chief Executive Officer, David Constable, at the inauguration of the Ethylene Purification Unit 5 (EPU5), Sasolburg, earlier this year. 5

8 6 Sasol s and South Africa s first stand-alone gas-to-power plant in Sasolburg was commissioned in December 2012.

9 Low-carbon power generation In Mozambique, we advanced the development of our 175 megawatt (MW) gas-fired electricity generation plant at Ressano Garcia, in partnership with the country s state-owned power utility, Electricidade de Moçambique (EDM). EDM is the sole off-taker of the electricity, under a power purchase agreement. The power plant was officially opened in August Commissioned in December 2012, our R1,5 billion gas-fired power generation plant in Sasolburg South Africa s first stand-alone gas-to-power plant is capable of producing 175 MW of power. The natural gas feedstock for the plant comes from our Central Processing Facility in Temane, Mozambique. As a result of this and other projects, we have a cumulative capacity to self-generate up to 70% of our electricity requirements in South Africa, easing power grid constraints and promoting cleaner electricity generation. The 175 MW gas-to-power electricity generation plant, Ressano Garcia, Mozambique. The plant was opened in August this year. 7

10 8 Expansion of the Central Processing Facility, Temane in Mozambique during 2012 increased capacity to 183 million gigajoules per annum.

11 Stimulating regional co operation 2014 marks the 10 th anniversary of our natural gas project in Mozambique. Developed by Sasol, in co-operation with the South African government, our partners, Companhia Moçambicana de Hidrocarbonetos, representing the Mozambican government, and the International Finance Corporation, the project is a beacon for regional co-operation and African energy and infrastructure development. The natural gas fields in Mozambique were technically stranded for several decades, due to limited markets and infrastructure, as well as uncertain political conditions. Sasol s markets in South Africa enabled the monetisation of Mozambique s abundant gas resources. The gains of producing and bringing Mozambican natural gas to South Africa has been mutually beneficial, resulting in: a bilateral trade agreement between South Africa and Mozambique; a Central Processing Facility where the gas is cleaned and dried before being transported via an 865 km pipeline to Sasol s gas reticulation network in Secunda; the switching of our Sasolburg platform from coal to gas, thereby reducing our carbon footprint; the opening of the South African natural gas markets in the domestic and industrial sector. Today we have approximately 550 industrial and commercial customers; natural gas off-take in Mozambique; and the creation of a favourable and safe investment climate, and establishment of an oil exploration and production sector in Mozambique. Despite significant natural gas discoveries in the north of Mozambique, Sasol is still the only operator to monetise gas in the region. Our cumulative direct contribution to the Mozambican government over the first 10 years was more than US$616 million, while together with our partners, we committed approximately US$3 billion in capital investment over this period. With the South African and Mozambican governments, we established a viable gas industry that, today, is poised to play an increasingly important role in the domestic energy mix and regional socio-economic development. 9

12 10 10 A drilling rig used during a recent Sasol offshore exploration programme in Mozambique.

13 Actively pursuing upstream opportunities Southern Africa, like most other emerging markets, is entering the most energyintensive phase of its economic development. To support the region s energy requirements, we are actively pursuing new hydrocarbon resources, with a particular focus on natural gas. This is key to secure not only the feedstocks we need to grow and sustain our integrated Southern African value chain, but also to enhance energy security and diversify the region s energy mix. We have several exploration interests in Mozambique, both onshore and offshore, that are at various stages of development. Under the country s proposed Gas Master Plan, which prioritises the development of electricity, gas-to-liquids, chemicals and fertiliser plants all areas where we have proven expertise we believe we can continue to add value, based on our ability to develop and commercialise technology at scale. In South Africa, we signed an exploration right permit to explore for hydrocarbons along the country s east coast, offshore KwaZulu-Natal, in November The permit was granted by the Department of Mineral Resources (DMR) for an initial period of three years and covers an area of km 2. We have already completed a 2D seismic survey of km in the exploration area, with further seismic work currently underway. In May 2013, together with our 50% partner PetroSA, we were granted a technical co-operation permit (TCP) by DMR for Block 3A/4A in the offshore Orange basin along South Africa s west coast. With PetroSA, we are conducting a regional study of the area, which will determine whether we apply to convert the TCP to an exploration right. In tandem, we continue to develop our experience in the safe and environmentally responsible extraction of shale gas, through our interests in two Canadian shale gas assets. These are the Farrell Creek and Cypress A assets in the Montney Basin in British Columbia, in which we acquired a 50% interest in 2010 and 2011, respectively. While Sasol does not hold any licenses within the Karoo region, we remain interested in the upstream oil and gas potential, including shale gas in the Karoo and elsewhere. As a consequence, we continue to monitor regulatory developments relating to hydraulic fracturing, and if new commercially viable opportunities are presented, we will actively evaluate and pursue these. 11

14 12 The Anaerobic Membrane Bioreactor a wastewater cleaning pilot project, Sasolburg. It is anticipated that the technology will be commercially ready early in 2015.

15 Growing responsibly and sustainably Growing our business depends on: 1) our ability to attract and retain the best employees; 2) ensuring continued access to vital natural resources and feedstock; and, 3) maintaining positive and trust-based relationships with our key stakeholders. Achieving each of these elements requires us to operate in an informed, responsive and socially responsible manner, as the following initiatives illustrate: Several projects have been initiated to support Secunda s environmental sustainability, which include the replacement of tar tanks and separators, the volatile organic compound abatement project, and the coal tar filtration east project. The total approved cost of these three projects is estimated at R7,5 billion. We continue to consider carbon capture and storage (CCS) as part of our long-term carbon dioxide (CO 2) mitigation plans. As a shareholder in the CO 2 Technology Centre Mongstad in Norway, we are supporting the development of technology for the large-scale capture of CO 2 from dilute flue gas streams. We also contribute to the South African Centre for CCS and are developing inhouse knowledge on applying various cleaner coal technologies. We have voluntarily committed to a 15% reduction in greenhouse gas (GHG) emissions intensity of all our existing operations by 2020 from a 2005 baseline. The group s approach to reducing GHG emissions is based on increased use of lower-carbon energy, utilisation of environmental offsets and improved energy efficiency at our operations. Sasol and General Electric are collaborating on a water-technology pilot project that will clean wastewater from plants producing synthetic fuels and chemicals and supply biogas as a by-product for power generation. The anaerobic membrane technology will be further developed at a new demonstration plant at Sasol s research campus in Sasolburg. 13

16 During our 2014 financial year our preferential procurement was R33,4 billion and represented 86,8% of our total measured procurement spend of R38,45 billion. We have significantly improved our procurement from emerging medium enterprises, qualifying small enterprises, and black and womenowned enterprises. This past financial year our investment in socio-economic development was R498 million and our skills development spend was R901 million. Sasol is one of the top contributors to the national fiscus, having paid R36 billion during 2014 in direct and indirect taxes. 14

17 ur new global headquarters, currently under construction in Sandton, O Johannesburg, will target a 5 Star Green Star rating from the Green Building Council of South Africa. Designed to the highest standards and showcasing contemporary architecture, the state-of-the-art building will feature a range of innovative technologies that will enhance energy efficiency and conserve water. I n 2012, when we launched our Ikusasa public private partnership initiative, we confirmed that we would be investing over R800 million to upgrade local infrastructure over a four year period in the Govan Mbeki and Metsimoholo municipalities. During financial year 2014, in these communities, we have contributed R186 million to much needed improvements in the education, health, infrastructure and security sectors, with some 351 jobs already created. hrough our enterprise and supplier development activities, we have T supported over 770 small and medium enterprises and created over direct jobs since Sasol Siyakha, specifically created to develop blackowned enterprises, currently supports 66 businesses and has disbursed over R65 million in loans. Education, with a particular focus on mathematics, science and technology, is one of the priority areas of our corporate social responsibility programmes. 15

18 16 Our Synfuels growth programme in Secunda will increase production by 3,2%.

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20 Sasol Limited Copyright subsists in this work. No part of this work may be reproduced in any form or by any means without Sasol Limited s written permission. Any unauthorised reproduction of this work will constitute a copyright infringement and render the doer liable under both civil and criminal law. Sasol is a registered trademark.