KCS inks construction, lease pact with Sasol Chemicals for rail yard

Kansas City Southern subsidiary Kansas City Southern Railway Co. (KCSR) has reached an agreement with Sasol Chemicals LLC for the construction and long-term lease of a storage-in-transit rail yard to support Sasol's new ethane cracker and derivatives project in Lake Charles, La.

KCSR will build the yard and lease it to Sasol, as well as replace and expand its rail-car classification yard in Mossville, La.

"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," said KCS President Patrick Ottensmeyer in a prepared statement.

In October 2014, Sasol announced the $8.1 billion ethane cracker derivatives complex in Louisiana. The center of the project is an ethane cracker designed to produce 1.5 million tons of ethylene annually. An additional $800 million will be invested in infrastructure and utility improvements. Construction is underway with operations slated to start in 2018.

"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."