Sasol Ltd. says a decision on whether to proceed with a facility in the Lake Charles area to turn natural gas into transportation fuels will depend on cost overruns at an $8.1 billion chemical plant it’s building there. The South African petrochemical firm announced on Monday that it has made its final investment decision to proceed with an ethane cracker plant in Lake Charles. The company is also considering a gas-to-liquids facility at the same site.
A decision to proceed on what would be the first plant of its kind in the United States will depend on costs at the ethane cracker plant, the prices of oil, diesel and gas, and the health of the global economy, Sasol CEO David Constable tells Bloomberg. A decision is expected in 2016.
“We need to get much more accurate project estimates, keep a close eye on the cracker and what its capex does in construction and then take a view on the GTL with that information and the macroeconomics at the time,” Constable says.
Both projects are being proposed to capitalize on a jump in North American gas output from shale formations. The GTL project, which Constable last year estimated would cost $14 billion, would produce diesel fuel and waxes. The project is in the front-end engineering and design phase, he says.
