South African petrochemicals group Sasol on Wednesday said it would delay its $8.1 billion investment in an ethane cracker in Louisiana, in response to low global oil prices.
In a statement, the company also said it would identify other opportunities to cut costs over the next 30 months.
A cracker converts ethane taken from natural gas into ethylene, the basic building block in the manufacture of plastics and chemicals.
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The investment decision comes amid a drop in global oil prices that prompted Goldman Sachs Group Inc. to cut its outlook for crude and US ethylene producers.
Most of the world’s ethylene is made from naphtha, an oil derivative.
Ethylene and polyethylene prices historically have a strong correlation with crude oil, Robert Koort, a Houston-based analyst at Goldman, said in a report last year.
