JOHANNESBURG/LAKE CHARLES, Louisiana - Sasol Limited, a South African integrated petrochemical company, Monday announced its decision to set up a $8.1 billion ethane cracker and derivatives complex at its existing site in Lake Charles, Louisiana.

An ethane cracker plant uses ethane from natural gas to produce ethylene, a compound used in the manufacture of plastics and chemicals.

The world's biggest maker of motor fuel from coal, Sasol said ethane cracker will produce 1.5 million tons of ethylene annually, benefitting from significant economies of scale. Plentiful availability of cheap shale gas is expected to work in favour of Sasol's project in the US.

The complex in Lake Charles also includes six chemical manufacturing plants. Approximately 90 percent of the cracker's ethylene output will be converted into a diverse slate of commodity and high-margin specialty chemicals for markets in which Sasol has a strong position, underpinned by collaborative customer relationships.

"Once commissioned, this world-scale petrochemicals complex will roughly triple our chemical production capacity in the United States, enabling Sasol to further strengthen its position in a growing global chemicals market. The U.S. Gulf Coast's robust infrastructure for transporting and storing abundant, low-cost ethane was a key driver in our decision to invest in America," said David Constable, President and Chief Executive Officer of Sasol in a statement.

"In spite of a largely volatile macroeconomic outlook, we are confident that we will deliver this project successfully......The Sasol team and our contractors have strong track records in project management, engineering, fabrication and construction of similar large-scale petrochemical complexes, with deep expertise along the U.S. Gulf Coast."

An additional $800 million is to be invested in infrastructure and utility improvements, and land acquisition, to establish Lake Charles "as an integrated, multi-asset site that will enable growth for decades to come," Sasol said.

Site preparation for the proposed project is already underway.

Sasol has appointed Fluor Technip Integrated, a joint venture between Fluor Corp. and Technip SA, as the primary engineering, procurement, and construction management contractor The project management team is also supported by WorleyParsons.

"The economic benefits of this project will extend to all of our shareholders, 67% of whom are located in South Africa. It will also enable us to pursue further growth opportunities in Southern Africa," said Constable.

"In addition, this project will deliver significant benefits to the State of Louisiana and the United States. More specifically, it will enhance local investment and job creation in the surrounding communities, while strengthening downstream manufacturing and increasing exports."

Setting up of the ethane cracker plant may precede Sasol's plans to construct a gas-to-liquids complex in Lake Charles. Sasol expects to take a decision on setting up one of the world's largest gas to liquid (GTL) plant within two years.

Sasol stated that it is in the advanced stages of "raising the funds required for construction and will utilise a variety of international U.S. dollar-based sources".

The Johannesburg and New York stock market listed company is targeting to achieve beneficial operation in 2018, it said.

Sasol declined for a fourth day, losing 1.7 percent to 547.70 rand by 3:17 p.m. in Johannesburg.