Cheap and abundant natural gas in Louisiana this year prompted plans for several multimillion-dollar petrochemical projects in the Gulf state, including one of the largest by South Africa’s Sasol Ltd., TimesPicayune reports.
Louisiana approved a $257-million incentive program in August to persuade South Africa’s Sasol to move ahead with construction of its proposed $21-billion petrochemical complex in Westlake.
The complex will include a cracker that will convert ethane natural gas to ethylene, a key raw material in plastic production, as well as a $14-billion plant that will turn natural gas into diesel, other fuels and chemicals, according to TimesPicayune.
The Sasol project is one of the largest of more than $84 billion in planned petrochemical investments in South Louisiana prompted by low natural gas prices.
Others have announced billion-dollar expansions including Methanex Corp. and Dow Chemical, the report said.
Earlier in December, Royal Dutch Shell put on hold plans for a $20-billion gas-to-liquids plant south of Baton Rouge. The plant would have converted natural gas into diesel and other fuels typically made from oil. Shell said soaring project costs and uncertainty about the future of domestic oil and gas prices prompted its decision.
Although a number of domestic and international companies have plans to expand or add plants in Louisiana, few have made a final decision on their investment, the report said.
Sasol told investors in September that it is still looking for project financing and loans, and may sell U.S. bonds to fund construction of a cracker at its planned Westlake complex.
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