By PAUL BURKHARDT

Sasol delayed its decision on whether to build the US’s first gas-to-liquids (GTL) plant as the South African company announced plans to mitigate against lower oil prices.

The facility, to be located next to an $8 billion ethane cracker in Lake Charles, Louisiana, was estimated in 2013 to cost $14 billion. The cracker that converts ethane into ethylene used to make chemicals that go into antifreeze and water bottles, was approved in October and the final decision on the GTL plant was expected to follow within two years.

“Albeit at a much slower pace, we will continue to progress the US GTL facility,” CEO David Constable said in a statement Wednesday. “North America and our home base in southern Africa remain strategic investment destinations for Sasol.”

Producers are revisiting expansion and investment strategies after oil fell more than 50 percent over the last six months. Some programs haven’t survived the decline, with Qatar Petroleum and Royal Dutch Shell last week saying they’ve ended plans for a $6.5 billion petrochemical plant in the Middle East nation. Sasol’s revenue is linked to the dollar price of oil.

Shell abandoned plans in 2013 to build a $20 billion GTL plant in Louisiana, which would have had a capacity to produce 140,000 bpd of liquid fuels. The project was capital-intensive and high-risk, Deutsche Bank said in a note at the time.

Sasol’s response to lower oil prices includes identifying opportunities for cash savings over the next 30 months “over and above the current target” of at least 4 billion rand in sustainable savings by 2016 that it announced last year as part of its business performance-enhancement program.

“The decision to delay the final investment decision should be commended,” said Abdul Davids, the head of research at Kagiso Asset Management in Cape Town. While the GTL plant would not be viable at current oil prices, “the ethane cracker would still be viable albeit with much lower returns,” he said.

Costs to produce ethylene have reached their lowest level in the US in 25 years due to expanding supply, according to data compiled by Bloomberg. Since 2012, US ethylene costs have fallen more than natural-gas prices.

West Texas Intermediate crude fell 60% from its 2014 peak to $44.20/bbl on Jan. 13 on the New York Mercantile Exchange and was at $45.48 by 11:21 a.m. in London. Prices of natural gas haven’t dropped as sharply as crude oil used in conventional refineries, declining 36% in the period.

“The amount of new ethylene supply is expected to be much lower given announced cancellations of ethaneprojects by some of Sasol’s competitors and this bodes well for pricing in the future,” Davids said.

Sasol derives about 50% of its revenue and 75% of its operating profit in South Africa, according to data compiled by Bloomberg.

The company started its first GTL plant outside South Africa in Qatar in 2007. With Nigerian National Petroleum Corp. and Chevron, it has built a similar facility in Africa’s biggest economy and is constructing one in Uzbekistan with Uzbekneftegaz and Malaysia’s Petronas. The company has also planned a study with Enifor a GTL facility in Mozambique.