By TOM FOWLER
Royal Dutch Shell has selected a site south of Baton Rouge, Louisiana, for a potential multi-billion dollar project to convert natural gas into liquid fuels such as diesel and gasoline.
Louisiana will reimburse Shell for up to $112 million in costs, including public road improvements, land acquisition and infrastructure, should the company invest more than $12.5 billion in the project, according to a statement from the company and the state.
The state's transportation department is already planning $32 million in road improvements to serve the site.
Shell proposed the Louisiana project last year to take advantage of vast natural gas reserves unlocked by the successful combination of hydraulic fracturing and horizontal drilling.
If built, the project would be similar to Shell's Pearl gas-to-liquids (GTL) project in Qatar, which can produce about 260,000 bpd of liquid fuels.
Shell said it is still several years away from making a final investment decision on the project. But selecting a site allows the company to begin engineering studies and the permitting process, according to Jorge Santos Silva, executive vice president of Shell.
Dow Jones Newswires