Sasol delays final decision on US GTL project, cites low oil price

HOUSTON (ICIS)–Sasol has decided to delay the final investment decision (FID) on its large-scale gas-to-liquids (GTL) plant in Louisiana, the South Africa-based international energy and petrochemicals major said in an update on Wednesday.

The move is part of an “ongoing capital investment reprioritisation exercise” and a “comprehensive plan to conserve cash in response to lower international oil prices,” the company said.

However, Sasol confirmed that it is proceeding with the construction of its ethane cracker and derivatives complex in Louisiana.

The timing of the decision on the GTL project would take into consideration progress made on the ethane cracker and derivatives complex, as well as “prevailing market conditions and other strategic investment opportunities,” Sasol said.

“Albeit at a much slower pace, we will continue to progress the US GTL facility,” said CEO David Constable.

“This will allow us to evaluate the possibility of phasing in the project in the most pragmatic and effective manner,” Constable said.

“North America and our home base in Southern Africa remain strategic investment destinations for Sasol,” he added.

Previously, Sasol had said that it expected to make the FID on the GTL project two years from the ethane cracker FID which came in October 2014.

The sharp drop in oil prices since mid 2014 has prompted concerns that companies will review the viability of expansion plans in the US, with the possibility that some plants may not be built.

Additional reporting by Joseph Chang and Al Greenwood.