Gas to Liquids: Unlocking Value From Natural Gas

Dragan Djakovic, Business Development Manager

Texas A&M
Gas and Fuels Research Initiative
28 March 2014
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forward-looking statements

Forward-looking statements: Sasol may, in this document, make certain statements that are not historical
facts and relate to analyses and other information which are based on forecasts of future results and
estimates of amounts not yet determinable. These statements may also relate to our future prospects,
developments and business strategies. Examples of such forward-looking statements include, but are not
limited to, statements regarding exchange rate fluctuations, volume growth, increases in market share,
total shareholder return and cost reductions. Words such as “believe”, “anticipate”, “expect”, “intend”,
“seek”, “will”, “plan”, “could”, “may”, “endeavour” and “project” and similar expressions are intended to
identify such forward-looking statements, but are not the exclusive means of identifying such statements.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and
specific, and there are risks that the predictions, forecasts, projections and other forward-looking
statements will not be achieved. If one or more of these risks materialise, or should underlying
assumptions prove incorrect, our actual results may differ materially from those anticipated. You should
understand that a number of important factors could cause actual results to differ materially from the
plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements.
These factors are discussed more fully in our most recent annual report under the Securities Exchange
Act of 1934 on Form 20-F filed on 9 October 2013 and in other filings with the United States Securities
and Exchange Commission. The list of factors discussed therein is not exhaustive; when relying on
forward-looking statements to make investment decisions, you should carefully consider both these
factors and other uncertainties and events. Forward-looking statements apply only as of the date on which
they are made, and we do not undertake any obligation to update or revise any of them, whether as a
result of new information, future events or otherwise.

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presentation outline

about Sasol

GTL value proposition

ORYX GTL, Qatar

the North American energy landscape

Sasol’s US projects

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 about Sasol

GTL value proposition

ORYX GTL, Qatar

the North American energy landscape

Sasol’s US projects

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Sasol at a glance

● An international integrated energy

and chemical company
● Turnover (US$20.5bn)1
● The world’s largest producer of
synthetic fuels
● Market cap (US$28.3bn)2
● Pioneer in gas-to-liquids (GTL) and
coal-to-liquids (CTL) technology ● Listed on JSE (SOL) and
NYSE (SSL)
● 60 years experience in gas
conversion related technologies ● Exploration, development, production,
● In-house technology development marketing and sales operations in
capacity more than 38 countries

● Strong intellectual property portfolio ● ~35 000 employees worldwide

● Joint venture partner with Qatar
Petroleum in ORYX GTL – 32,400
bpd GTL plant
Notes
● 1 For year ending 30 June 2013
● 2 Market capitalisation at 30 June 2013

● Already a strong presence in the US

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a history in synthetic fuels

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a history in synthetic fuels

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 about Sasol

GTL value proposition

ORYX GTL, Qatar

the North American energy landscape

Sasol’s US projects

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gas to liquids (GTL) in a nutshell

Product work-up GTL products

Diesel, naphtha,
LPG
Optional: kero,
Natural gas Reforming GTL synthesis paraffins, base
as feedstock oils, waxes

10 mcf 1 barrel of product

1 bcf/d 100 000 bbl/day
1 tcf reserve 100 million bbl of products
Over 30 years

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GTL fuels can be supplied through
existing supply infrastructure

• compatible with existing engine technology and fuelling infrastructure

 
tankers existing fuelling infrastructure

 
pipeline conventional engines
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GTL is responsive to market demands

transportation fuel demand

(millions of oil-equivalent barrels per day)

• middle distillate is the fastest

growing segment of the
transport fuel demand
• GTL produces 65-75% of
product in the middle
distillate range, with the
balance of the slate
comprising chemical
naphtha or added value
chemicals, with no “bottom
of the barrel” products

Source: ExxonMobil Outlook for Energy (2012)

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GTL raises the bar on quality and performance

● clear, clean burning fuels with high

cetane number and no sulfur or aromatics
● can be used “pure” or in blends
● upgrades refinery streams and
reduces constraints
● could enable development of new generation
internal combustion engine technologies
● improved engine efficiency
● further reduction in tailpipe emissions
● naphtha is an ideal cracker liquid feedstock or
diluent for oil sands bitumen

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GTL reduces engine-out emissions

GTL diesel emissions vs EN590 reference diesel

20

CO2
-20 NOx
% difference

min
-40 max
PM average
-60
THC
-80

CO
-100

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 GTL value addition
large fuels markets could
sustain multiple world
100 scale plants
automotive USGTL
90 diesel ~96,000 bpd

80
70
% plant yield

60
jet fuel Chemicals markets
50 offer opportunities to
add value
40
30 chemical
naphtha
base waxes
20
oils
10
(Note: relative global market sizes and product values are approximate)

Product value
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GTL can improve energy security
(certain cases)

• diversifies transport fuels supply

• can reduce dependence on imported petroleum products
US net imports of crude oil and petroleum products
(‘000 barrels per day)
16000

14000

12000

10000

8000

6000

4000

2000
~100,000 GTL bpd ~ 1.5% of current USA net imports
0
Jan-1973
Feb-1974

Jun-1978

Jan-1986
Feb-1987

Jun-1991

Jan-1999
Feb-2000

Jun-2004

Jan-2012
Feb-2013
May-1977

May-1990

May-2003
Jul-1979
Aug-1980
Sep-1981

Nov-1983
Dec-1984

Jul-1992
Aug-1993
Sep-1994

Nov-1996
Dec-1997

Jul-2005
Aug-2006
Sep-2007

Nov-2009
Dec-2010
Oct-1982

Oct-1995

Oct-2008
Apr-1976

Apr-1989

Apr-2002
Mar-1975

Mar-1988

Mar-2001
Source: EIA

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GTL offers gas market diversity for
resource owners

traditional pathways for natural gas to remote markets

or
chemical conversion ORYX GTL, Qatar

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the GTL value proposition is compelling

● alternative natural gas monetization option

● pathway for natural gas into transportation
● energy security
● products transparent to supply infrastructure
● high product quality relative to conventional equivalents
● product responsive to markets demands
● middle distillates and chemicals
● sound environmental credentials
● job creation
● fiscal revenue

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 about Sasol

GTL value proposition

ORYX GTL, Qatar

the North American energy landscape

Sasol’s US projects

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ORYX Qatar, Sasol’s GTL flagship

● A joint venture with Qatar Petroleum

● 32 400 bbl/d nameplate capacity (GTL diesel, GTL naphtha, LPG)
● First cargo shipped to international markets in April 2007
● A total of 56+ million barrels produced to date
● On-line availability has improved significantly, enabling stable, increased production
● nine months at 99+% on-line availability

Highly profitable venture with handsome returns to shareholders

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ORYX GTL (32,400 bpd)

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other GTL projects in the pipeline

Escravos GTL, Nigeria OLTIN YO’L GTL, Uzbekistan

● Joint venture with Chevron + NNPC ● Joint venture with Uzbekneftegaz + Petronas
● 32 400 bbl/d – Oryx look alike ● 38 400 bbl/d – enhanced Oryx
● GTL diesel, naphtha, LPG ● GTL diesel, kero, naphtha and LPG

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identified various levers to extract greater value

Improving Driving
capital technology
productivity Improving improvement
product
value

● Across the fence utility ● Reactor intensification

● Chemicals
supply ● Generation 3 FT catalyst
● Electricity
● Modularisation ● Improvement in reforming
● Base oils
● Partnerships and alliances technology

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 GTL reactor facts

• Height = ~170 ft (~50 m)

• Diameter = ~35 ft (~10 m)
• Mass = ~2,200 tons

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scale up and intensification of GTL reactor
● Significant scale-up during
successful commercialization at
ORYX GTL
● Subsequent focus on intensification
to increase production in essentially
the same shell
● Enabled by:
● Integrated catalyst and reactor
technology developments
● Intensive fundamental studies,
model systems and semi-
commercial piloting
● Understanding critical design
parameters and margins based on
commercial operation – enabled
significant optimization
● US GTL design at 150% of ORYX
GTL reactor capacity

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 about Sasol

GTL value proposition

ORYX GTL, Qatar

the North American energy landscape

Sasol’s US projects

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shale gas has changed the face of North
American energy and chemical markets

History 2009 Projections

30
US dry gas (trillion cubic feet per year)

1%
25
Net imports
11%
20 Shale gas 45%
14%

15 20%
Non-associated onshore 8%
9%
Non-associated offshore 8%
10
28% Tight gas 22%
5
8% Coal-bed methane 7%
2% Alaska 1%
9% Associated with oil 7%
0
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
Source: EIA, Annual Energy Outlook 2011

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…e.g. natural gas imports/exports

2004 2014

Source: EIA Annual Energy Outlook 2004/2014

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…e.g. fuel mix for electricity generation

2004 2014

Source: EIA Annual Energy Outlook 2004/2014

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paradigms have shifted…

2004 2014

Source: EIA Annual Energy Outlook 2004/2014

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GTL exploits the differential
between gas and liquids pricing

Brent crude oil price ($/bbl) expressed as a multiple of

Henry Hub natural gas price ($/mmBtu)
40

30

20

10

0
1992 1997 2002 2007 2012 2017 2022 2027 2032 2037

actual EIA (2013)

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North America… the new frontier for GTL
Brent crude oil price ($/bbl) expressed as a
multiple of Henry Hub natural gas prices ($/mmBtu)
40

30

20

10
+
0
1992 1997 2002 2007 2012 2017 2022 2027 2032 2037
actual EIA (2013)

divergence between established gas pipeline

oil and gas prices network

attractive investment environment for GTL

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 about Sasol

GTL value proposition

ORYX GTL, Qatar

the North American energy landscape

Sasol’s US projects

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in December 2012 Sasol announced its
decision to proceed with FEED for world scale
cracker and GTL projects in Louisiana, USA

Louisiana Governor Bobby Jindal

& Sasol CEO David Constable
FEED Announcement (December 3, 2012)

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 Sasol North America
Lake Charles Chemical Complex

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chemicals facility

● a world scale ethane cracker will produce approximately 1.5 million tons of
ethylene per year which will be converted on-site by seven downstream to a range
of high-value derivatives
● estimated project capital investment: US$ 5 billion to US$ 7 billion
● final investment decision: 2014
● construction phase: 2014-2017

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gas-to-liquids facility

● ~1 billion cubic feet per day of natural gas will be converted to 96,000* barrels per
day of liquid fuels and chemicals including GTL diesel, GTL naphtha, liquefied
petroleum gas, paraffin, GTL base oils and medium and hard waxes
● estimated project capital investment: US$ 11 billion to US$ 14 billion
● final investment decision: 2016

● construction phase: 2016-2020

*nominal capacity

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US GTL product marketing

a Sasol wholly owned facility with a nominal capacity of 96 000 bbl/d

wax products

debottleneck in
reactor wax wax Hamburg,
oxygen LPG Germany
extraction
phase 1

fuels
natural gas syngas sasol LTFT product naphtha new
natural reforming process work -up
gas emulsification
condensate Process * units
paraffin
diesel
extraction

paraffins

Paraffin for LAB production

new LAB unit in
Lake Charles
LPG
condensate paraffin fuels
oxygen product
extraction
phase 2

naphtha minor
work -up
natural gas syngas sasol LTFT modifications in
natural reactor wax Process * Augusta, Italy
reforming process
gas diesel

base oils
base oils

* flexible design allows for operation in fuels only or value adds mode

● a balanced product portfolio of 29% chemicals and 71% fuels (by mass)
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in summary
GTL value proposition
● Arbitraging gas and oil - shale
gas revolution
● Technology enhancements -
extending our lead
● World class products
● Chemical value adds
● Integrated value chain
Lake Charles
● World class infrastructure
● Supportive government
● Access to multiple markets
● Competitive labour and
contractor market
● Abundant feedstock compelling
investment
opportunity
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Thank you

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