logo
Share SHARE
FONT-SIZE Plus   Neg

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

European oil giant Royal Dutch Shell Plc. (RDS-A, 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) 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.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

More Breaking News

Editors Pick
Tesla's next electric car Model 3 is aimed at the masses with a price tag that could go below $30,000. Tesla CEO Elon Musk, during an earnings call, confirmed that the Model 3 will start selling for "around $35k," and reservations will start from March 31 in Tesla stores and online on April 1 for... Advanced Disposal Services Inc. joins the growing list of companies to postpone their initial public offering amid the volatility in stock markets. Breakfast and snack food giant Kellogg Co. on Thursday reported a loss for the fourth quarter that narrowed from last year as lower revenues were more than offset by a decline in costs and expenses. Adjusted earnings per share for the quarter topped analysts' estimates, while revenue fell short of expectations. Looking ahead, the company affirmed its financial outlook for fiscal 2016.
comments powered by Disqus
Follow RTT