Oil price falls cast doubt on $11bn Louisiana fuel plant

South African energy company Sasol has announced that it is to delay a final decision on whether to greenlight a $11bn project near Lake Charles in south-western Louisiana. 

The gas-to-liquids plant was expected to have created 500 permanent posts in the region as well as 5,000 temporary construction jobs, however doubt has been cast on its likely profitability by the decline in global oil prices. 

The plant, which would have had a production capacity of 96,000 barrels a day of fuel, was due to have been completed in 2018. 

David Constable, the president of Sasol, said: "Albeit at a much slower pace, we will continue to progress the gas-to-liquid facility. This will allow us to evaluate the possibility of phasing in the project in the most pragmatic and effective manner." 

Sasol has decided to proceed with an $8bn ethane cracker and derivatives complex in Louisiana. There is a possibility that that plant will be adapted to convert natural gas into fuel. 

Sasol said it would continue to advance its investments in Southern Africa. 

The decline in oil prices has also caused Shell to cancel a $6.5bn petrochemicals plant in Qatar.

Photograph: A Sasol plant (source: Sasol)

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