For The Record: Shell To Shelve GTL Plant In Louisiana
Bloomberg is reporting:
Royal Dutch Shell Plc, Europe’s
biggest oil company, halted plans to build a $20 billion gas-to-liquids plant in Louisiana, citing the potential cost and
uncertainty about future crude and natural gas prices.
The project would have used natural gas to produce 140,000
barrels a day of liquid fuels and other products normally made
from oil, The Hague-based company said in a statement today.
Despite ample U.S. gas supplies from a boom in shale production,
gas-to-liquids isn’t “a viable option for Shell in North
America,” the company said.
Shell started the first commercial gas-to-liquids plant in
1993, using a process developed in Germany and used to make
fuels during World War II. The company completed the $19 billion
Pearl gas-to-liquids facility, the world’s largest, in Qatar in
2011. South Africa’s Sasol Ltd., the largest producer of motor
fuel from coal, announced plans last year to build a $14 billion
gas-to-liquids plant in Louisiana.
“While we cannot speak to another company’s plans, we
continue to view our proposed GTL facility in Louisiana as a
very attractive opportunity as we advance it through the front-end engineering and design phase,” Russell Johnson, a spokesman
for Johannesburg-based Sasol, said in an e-mail today.
The economic viability of turning natural gas into fuels
depends on the relationship between oil and gas prices.
For a
gas-to-liquids plant to make money, a barrel of oil has to trade
at a ratio of about 16 times the cost of a million British
thermal units of natural gas, Sasol Chief Executive Officer
David Constable said in an interview last year.
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