The reality is sinking in. The longer crude oil prices stay low, the greater the risk to US gas-based petrochemical and other projects. Delays and cancellations could range from ethane crackers to on-purpose propylene plants, to gas-to-liquids (GTL) facilities and liquefied natural gas (LNG) export terminals.
Sasol, while breaking ground on its new $8.1bn ethane cracker and derivatives project in Lake Charles, Lousiana, US, announced it is delaying the final investment decision (FID) on its proposed $15bn GTL plant in the same state. 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,” Sasol said.
The timing of the GTL project would take into consideration progress made on the cracker 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.”
Sasol had expected to make an FID on GTL by 2016.
Additional contribution by Stefan Baumgarten