Sasol Integrated Report 2022 - Book - Page 16
INTRODUCTION | ABOUT SASOL
STRATEGIC OVERVIEW
CREATING VALUE
DELIVERING
GOVERNANCE AND REWARDS
ADMINISTRATION
PRESIDENT AND CHIEF EXECUTIVE OFFICER’S STATEMENT (CONTINUED)
Our financial position improved significantly from 12 to 18 months ago.
For our South African value chain, one of the key
enablers to achieve our 2030 target is a boiler
turndown with a fine coal solution – the phased
shutdown of our boilers cannot be done without
a solution for the fine coal feedstock which we
use today to produce steam and electricity for
our FT process. A fine coal solution has recently
been confirmed as feasible, which enables our
integrated GHG and air quality solution in our
Secunda Operations.
Our Chemicals business, in a bid to produce
more circular and sustainable products, had
its first sales of sustainably certified products
through lower-carbon intensity renewable
feedstocks from our three largest European sites –
Marl, Brunsbüttel and Augusta.
Together with our partner, TotalEnergies, we are implementing a low-cost
solution that will produce Clean Fuels II compliant diesel.
We are aiming to procure 1 200 MW of renewableenergy capacity from IPPs by 2030. This will
represent one of the largest renewable-energy
procurement programmes from the private sector
in South Africa.
In Europe, we entered into several Power Purchase
Agreements for our German and Italian operations
and concluded a supply agreement for the
provision of CO2-neutral biomass-based steam
to our Brunsbüttel site in northern Germany.
These agreements are expected to reduce
CO2 equivalent emissions by 72 kilotons per annum
when commercial operation is attained.
On gas, we have made significant progress based
on our recent drilling activity, where initial results
indicate that we can optimise our supply profile
from existing Mozambican assets to extend our
plateau production until 2028, with sufficient
capital allocated. The Production Sharing Agreement
(PSA) project is progressing well and within budget.
We are also partnering to pursue adjacent exploration
acreage to access more gas. This is a huge step
forward and ensures that we have flexibility in our
gas supply profile as we progress delivering on
our 30% GHG reduction pathway.
We are also advancing negotiation of a term sheet
for 40 – 60 petajoules of liquified natural gas (LNG)
from 2026 onwards to provide supply flexibility.
Looking at other low-carbon enablers, green
hydrogen remains a key focus. In Sasolburg,
the final investment decision for our green
hydrogen project was taken swiftly with the aim
of producing the first green hydrogen volumes
by end-2023.
I am pleased to report that we are assessing
innovative options for repurposing the Natref
refinery. We have completed a pre-feasibility
study on a green hybrid refinery concept, that
includes the introduction of bio-based feedstock
as a novel pathway to transition the refinery to
meet South Africa’s clean fuels compliance
standards, while reducing GHG emissions.
We continue to make progress on our Just
Transition approach and have defined principles
for developing our roadmap. Here we are
leveraging existing initiatives and undertaking
a collaborative approach with partners in line with
our commitment to anticipate and mitigate the
impacts of the transition.
Net Zero pathways progressing
Regarding our 2050 Net Zero ambition,
we continue to progress the techno-economic
studies on the pathways being considered.
Together with our partner, TotalEnergies, we are
implementing a low-cost solution that will
produce Clean Fuels II compliant diesel at Natref
towards the end of 2023. This is a positive step
towards domestic energy security.
Our GHG emission reductions will be achieved
through transformational pathways that
could also include decisions to cut-back
production in parts of the business. We could,
for instance, see our Secunda Operations’
production slate shifting fundamentally,
depending on demand profiles for energy products
in the longer term.
At Secunda Operations, we are progressing a
Sustainable Aviation Fuel (SAF) commercialisation
project, known as HyShiFT, in partnership with
Linde, Enertrag and Hydregen. The key offtaker
for this product will be H2Global, which was set
up by the German government to promote the
development of sustainable fuels across
many regions.
We are also playing a leading role in coastal
green ammonia export through the Boegoebaai
study. We have signed a Memorandum of
Agreement with the Northern Cape Development
Agency, to lead the pre-feasibility study, already
underway, to explore the potential of Boegoebaai
as an export hub for green hydrogen via an
ammonia carrier.
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Sasol ecoFT, which aims to provide Sustainable
Aviation Fuel (SAF) and related chemicals specialty
solutions using our proven Fischer-Tropsch (FT)
technology, has seen significant interest recently.
SAF remains one of the most promising pathways for
the aviation sector to decarbonise in future. We are
refining our go-to-market strategy and entered into
multiple collaboration agreements with venture
partners, feedstock suppliers, aircraft manufacturers
and other service providers to firmly position Sasol
within the developing SAF market.
The Lake Charles Chemicals Complex (LCCC) ramp-up
continues to be a focus in the short term. Beyond
that, we believe the site provides multiple attractive
future opportunities for enhancing value through
co-location and expansion as a sustainability
hub with partners.
We are also bolstering our Research and
Technology capabilities to support the
development of emergent and new green
technologies needed towards 2050. Green
technologies will not only contribute to our
Net Zero plans, but also play a critical role in the
broader societal move to net zero through the
application of our technologies.
Driving profitability through
operational improvement
FY22 was characterised by significant challenges
stemming from geopolitical tensions, adverse
weather events and the lag effects of the COVID-19
pandemic, among others.
Managing these impacts required greater levels of
agility, responsiveness, teamwork and collaboration
across Sasol, testing the effectiveness of our new
operating model introduced in FY21.
Despite this volatility, our financial position
improved significantly from 12 to 18 months ago.
While some of this improvement was supported
by a stronger macroeconomic environment,
it also demonstrated our resilience and agility
to adapt to a dynamic business landscape,
underpinned by robust cost and capital
expenditure performance and, focused safety
and operational improvement plans.
