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