Breaking News
FONT-SIZE Plus   Neg
Share SHARE

WSJ: Shell Mulls Gas-to-diesel Plant In Louisiana

European oil giant Royal Dutch Shell Plc. (RDS-A: Quote, RDSA.L, RDSB.L, RDS-B) is exploring the possibility of building a plant in Louisiana that will convert natural gas into diesel fuel, the Wall Street Journal reported Wednesday, citing people familiar with the matter. The plant, which would cost more than $10 billion, would reportedly be similar in size to Shell's Pearl gas-to-liquids or GTL facility in the Qatar. The Pearl facility turns natural gas into enough diesel to fill more than 160,000 cars per day.

According to the WSJ report, Shell initially considered locating the facility in Texas and Louisiana, but opted for the latter as the state offered better incentives. Shell may, however, take up to two years to develop construction and engineering plans to see if the project is economically viable.

The boom in natural gas production from shale formations in North America has resulted in lower natural gas prices even as oil prices are rising. This has prompted energy companies to look at turning natural gas into liquid fuels that is seen as financially appealing.

The technology to convert natural gas into a diesel fuel was developed in Germany during World War II. But the high costs of building GTL plants generally have prevented the technology from being commercially viable.

Shell built the first large-scale GTL plants in Qatar as that nation has an abundance of low-cost natural gas. Qatar has taken a strategic decision to diversify its gas production into GTL and access the lucrative global transport markets.

South Africa-based integrated energy and chemicals firm Sasol Ltd. (SSL: Quote) has a GTL joint venture with Qatar Petroleum, with a capacity of 21,400 barrels per day. The plant produces a combination of GTL diesel, GTL naphtha and LPG.

RDS-A closed Wednesday's trading at $69.06, down $0.95 or 1.36 percent on a volume of 2.11 million shares.

Register
To receive FREE breaking news email alerts for Royal Dutch Shell Plc and others in your portfolio

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
While buying interest has remained somewhat subdued, stocks are seeing modest strength in mid-day trading on Thursday. The slim gains on the day have lifted the S&P 500 to a new record intraday high above the 1,990 level. New home sales in the U.S. showed a notable decrease in the month of June, according to a report released by the Commerce Department on Thursday, with the steep drop offsetting the jump seen in the previous month. After reporting a modest drop in first-time claims for U.S. unemployment benefits in the previous week, the Labor Department released a report on Thursday showing that initial jobless claims unexpectedly fell to their lowest level in over eight years in the week ended July 19th.
comments powered by Disqus
FREE Newsletters, Analysis & Alerts

 

Stay informed with our FREE daily Newsletters and real-time breaking News Alerts. Sign up to receive the latest information on business news, health, technology, biotech, market analysis, currency trading and more.