When Harvey met Charles: Sasol counts cost of heavy hurricane season

It has resolved to exit its shale gas assets in Canada and will invest in no more greenfields gas-to-liquids (GTL) plants, since oil prices of $50-60 a barrel render them uneconomical.

"While our current GTL assets are generating good returns and cash flows, the value proposition for Sasol to build new GTL projects is uneconomic against a volatile external environment and structural shift to a low oil price environment", the company said in a statement Thursday.

The Lake Charles plant would have converted natural gas into diesel fuel and other refined products and accounted for the majority of a chemical complex with a price tag of $24 billion to $26 billion - the biggest industrial investment in Louisiana history.

Sasol said it will focus on completing its $11.1 billion ethane cracker at the complex, 79% complete as of September 30, Kallanish Energy reports.

Sasol's gas-to-liquids plant is the second such project to be abandoned in the state within the past four years.

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Sasol shocked investors in August 2016 when it raised the cost of the ethane cracker and chemicals complex under construction in Louisiana to $11bn, including a contingency, from $9bn previously.

Image: Sasol's olefins and surfactants plant in Lake Charles, Louisiana, US.

The company has more than doubled its permanent workforce in Louisiana, from 450 to almost 1,000 jobs averaging $80,000 a year, Don Pierson, secretary of Louisiana Economic Development, said in an emailed statement. "That small business effort has helped generate some $7.6 million in new capital invested by local entrepreneurs, along with 43 new business startups, creating 163 new small business jobs", he wrote.

The reviews conducted to date did, however, identify the Canadian shale gas asset as being non-core.

Additionally, Sasol said it plans to focus on production sharing agreement in Mozambique as well as extract further value from its existing portfolio of diversified assets, until 2022.

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