Moret: La. manufacturing outlook ‘outstanding’ even if Sasol scraps huge Lake Charles GTL plant
Louisiana Economic Development Secretary Stephen Moret tells Daily Report that even if Sasol Ltd. decides not to move forward with its plans to build the nation’s first gas-to-liquids plant in Lake Charles, the state’s outlook for manufacturing investment “continues to be outstanding.”
“We anticipate well in excess of $62 billion in manufacturing investment will be completed in Louisiana whether or not Sasol completes its second phase,” Moret says in an email to Daily Report, noting the South African firm is moving forward with a first phase project in Lake Charles; an $8 billion ethane cracker. “Similarly we continue to expect the creation of more than 91,000 new jobs from projects announced since January 2008 even if the second phase of the Sasol project does not proceed.”
Sasol announced this morning that it’s delaying a decision on whether to build the GTL plant in Lake Charles. The project was announced by Sasol and Louisiana officials in late 2012, with subsequent estimates on its value ranging from $14 billion and $21 billion. The delay comes as the South African company announced plans to mitigate the impact of lower oil prices.
As originally announced, the GTL plant was to be located next to the $8 billion ethane cracker the company is planning to build in Lake Charles.
On Tuesday, Moret told Daily Report that falling oil prices likely will cause a small number of the many industrial construction projects announced in recent years to be delayed or even scrapped altogether. But he predicted most of the announced projects will go forward, thanks to continued low natural gas prices.
“For several weeks, we have been evaluating the potential impact of a significant reduction in oil prices on previously announced projects and prospects currently in our business development pipeline,” Moret says this morning. “Because of the significance of oil prices to Sasol’s cash flow, Sasol is one of the companies we have been concerned about in terms of the timeline for the development of its second phase. Nevertheless, Sasol and LED remain optimistic that the GTL phase will proceed after a delay.”
In a statement issued this morning, Sasol CEO David Constable says: “Albeit at a much slower pace, we will continue to progress the U.S. GTL facility. North America and our home base in southern Africa remain strategic investment destinations for Sasol.”