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Shell considering gas-to-diesel plant in Louisiana

04.05.2012  | 

Royal Dutch Shell is considering building a giant plant in Louisiana that would convert natural gas into diesel fuel, several people familiar with the company's plans said. The Anglo-Dutch company is expected to take up to two years to develop detailed engineering plans to determine if the plant is economically viable.

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By RUSSELL GOLD

Royal Dutch Shell is considering building a giant plant in Louisiana that would convert natural gas into diesel fuel, several people familiar with the company's plans said.

The plant, which could cost more than $10 billion, would be similar in size to Shell's Pearl gas-to-liquids facility in the Mideast nation of Qatar, the people said.

Pearl, which went into operation last June, turns natural gas into enough diesel to fill more than 160,000 cars a day.

Shell declined to comment on its plans. The Anglo-Dutch company is expected to take up to two years to develop detailed engineering plans to determine if the plant is economically viable before submitting the project for approval by the company's board.

Shell's plans are the latest sign that companies are seeking new ways to exploit extensive natural-gas discoveries in the US.

The boom in gas production from shale has sent natural-gas prices down 50% over the past year to slightly over $2 per million British thermal units, the lowest level in a decade. Diesel prices are near a record, up 4% from a year ago.

In September, South Africa's Sasol said it was undertaking an 18-month feasibility study for a $10 billion gas-to-liquids facility adjacent to its existing chemical plant in Calcasieu Parish, La.

The technology to turn natural gas into a clean, low-sulfur diesel fuel was developed in Nazi Germany. But the high costs of building GTL plants generally have kept the technique from being commercially viable.

The first large-scale plants were built in Qatar because the nation has an abundance of low-cost natural gas. The cost of Shell's plant in Qatar escalated to about $18 billion, but the company hopes the knowledge gained there will help keep costs in check in Louisiana.

The diesel produced in the state could be exported to Europe and Latin America.

The US last year was a net exporter of petroleum products, such as diesel, for the first time in 62 years.

Shell considered locating the facility in Texas and Louisiana but opted for the latter because the state offered better incentives, a person familiar with the matter said.


The Wall Street Journal



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g verghese
06.06.2012

An alternate for diesel engines is dimethyl ether, a route for which is via POX with natural gas - which of these is a cheaper route to build and run ?

Sudhakara Poojary
04.16.2012

I appreciate Royal Dutch shell company for its plans and innovative steps in the Energy sector, turns natural gas to Quality Diesel. I hope, this will help global Diesel consumers to get satisfy and full fill their demand with quality Fuel.

By
Sudhakara Poojary
Electrical Technologist
Bangalore

Gustavo Heins
04.06.2012

Sasol as I knew, use this process or anything like this to convert coal in acpm

UOP IPL
04.06.2012

really seems to be good technology

Bill Cormeny
04.06.2012

I assume the EPA approval and existence of enormous gas fields around East Texas and West Louisiana makes this move sound. It's startling to watch as diesel prices outstrip gasoline prices.

Samuel Creel
04.06.2012

If this were to fail, how would it effect Louisiana and it's economy? Would this ultimately reduce the cost of diesel? What about the demand for natural gas. How will this be affected in the long run?

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