South African petrochemicals giant, Sasol, on Thursday said it had decided to delay the final investment decision on its large-scale, gas-to-liquids (GTL) plant in Louisiana, United States.

This has been attributed to the company’s on-going capital investment reprioritisation exercise. The company is currently formulating a comprehensive strategy to conserve cash in response to lower international oil prices.

“While the detailed actions underpinning Sasol’s response plan are being refined, certain decisive measures have already been agreed to and are being implemented,” Sasol said in a statement.

“These include identifying opportunities for additional cash savings targeted over the next 30 months. The focus areas are capital portfolio phasing and reductions, capital restructuring, working capital improvements, margin enhancement and further fixed cost reductions,” it added.

Cash flow improvements that have taken place in terms of the response plan will be over and above the current target of at least R4 billion ($346.7 million) in sustainable cost savings by 2016, which was confirmed last year as part of Sasol’s business performance enhancement programme.

The timing of the decision to delay investment on the US gas-to-liquids plant will take into consideration progress made with the execution of the company’s world-scale ethane cracker and derivatives complex, prevailing market conditions and other strategic investment opportunities.

“Albeit at a much slower pace, we will continue to progress the U.S. GTL facility. This will allow us to evaluate the possibility of phasing in the project in the most pragmatic and effective manner,” David Constable, CEO of Sasol.

“North America and our home base in Southern Africa remain strategic investment destinations for Sasol,” he added.

Sasol is proceeding with the construction of the ethane cracker and derivatives complex in Louisiana.