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

Editors Pick
Microsoft's (MSFT) office assistant Cortana for iOS beta has arrived, but only 2000 people will be able to test the virtual assistant. Apple confirmed that it has bought face animation software firm Faceshift, although it was tight lipped about how it intends to use the new addition. The move is speculated as a bid to expand into virtual reality. Environment ministry of South Korea Thursday ordered Volkswagen Korea to recall 125,522 diesel vehicles on determining actual emissions of nitrogen oxides. The ministry has asked the German automobile maker to pay a fine of 14.1 billion Won or $12.31 million. The company has to submit a recall plan by January 6, 2016.
comments powered by Disqus
Follow RTT