sasol c$1.05 billion shale gas acquisition

Sasol Agrees Second C$1.05 Billion Shale Gas Acquisition

March 8 (Bloomberg) -- Sasol Ltd., the largest producer of motor fuels made from coal and gas, agreed to pay C$1.05 billion ($1.08 billion) for a stake in the Cypress A project in Canada, it's second shale gas acquisition in less than three months.

The deal is in line with Sasol's plan of accelerating growth within its upstream resource base "by way of the acquisition of high quality natural gas assets," the company, based in Johannesburg, said in a statement today.

The purchase of 50 percent of Cypress A from Calgary-based Talisman Energy Inc. should be completed in the third quarter, Sasol said. The company last week completed the C$1.05 billion acquisition of 50 percent of Talisman's Farrell Creek operation. Both projects are in the Montney shale basin, in western Alberta and north-eastern British Columbia.

Chief Executive Officer Pat Davies is giving Sasol a foothold in the North American shale gas market as he bets that gas-based projects will be more profitable than the company's traditional business of producing motor fuels from coal. In 2007, he oversaw the start-up of the world's largest gas-to- fuels plant in Qatar.

"It's positive that they're acting so quickly on their strategy," Abri du Plessis, chief investment officer at Cape Town based Gryphon Asset Management, said by phone from the city today. "One could probably expect further announcements in the next year or so."

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