KCS and Sasol Sign Long-Term Agreement to Grow Petrochemical Business in Gulf Region

Kansas City Southern (KCS)

has announced that its U.S. subsidiary, The Kansas City Southern Railway Company (KCSR), has reached an agreement with Sasol Chemicals (USA) LLC (Sasol) for the construction and long-term lease of a storage-in-transit (SIT) rail yard to support Sasol's new ethane cracker and derivatives project in Lake Charles, La. In addition to building the SIT yard for lease to Sasol, KCSR will replace and expand its existing rail car classification yard in Mossville, La. "We are very pleased to expand our relationship with Sasol by entering into this long-term lease agreement," said KCS President Patrick J. Ottensmeyer. "In addition to serving Sasol's needs in Lake Charles for many years to come, this investment will better position KCSR to serve the growing petrochemical industry and other customers in the Lake Charles area." "KCS has been a key partner in ensuring safe and reliable delivery of our products to our customers for decades," said Mike Thomas, senior vice president of U.S. operations for Sasol. "We are delighted to extend our relationship with KCS as we increase the number and volume of products we manufacture at our Lake Charles site over the next several years." In October 2014, Sasol announced a final investment decision on an $8.1 billion ethane cracker and derivatives complex in Louisiana. At the heart of the project is an ethane cracker that will produce 1.5 million tons of ethylene annually, benefitting from significant economies of scale. The complex also includes six chemical manufacturing plants. An additional $800 million will be invested in infrastructure and utility improvements, as well as land acquisition, to establish the Lakes Charles location as an integrated, multi-asset site that will enable growth for decades to come. Construction is underway, and the company expects that the facility will achieve beneficial operation in 2018.