By BRADLEY OLSON
THE HAGUE (Bloomberg) -- Royal Dutch Shell
halted plans to build a $20 billion gas-to-liquids plant in
Louisiana, citing the potential cost and uncertainty about
future crude and natural gas prices.
The project would have used natural gas
to produce 140,000 bpd of liquid fuels and other products
normally made from oil, the company said in a statement.
Despite ample United States gas supplies from a boom in
shale production, gas-to-liquids isnt a viable
option for Shell in North America, the company said.
Shell started the first commercial gas-to-liquids plant in
1993, using a process developed in Germany and used to make
fuels during World War II. The company completed the $19
billion Pearl gas-to-liquids facility, the worlds
largest, in Qatar in 2011. Sasol, the largest producer of motor
fuel from coal, announced plans last year to build a $14
billion gas-to-liquids plant in Louisiana.
While we cannot speak to another companys plans,
we continue to view our proposed GTL facility in Louisiana as a
very attractive opportunity as we advance it through the
front-end engineering and design phase, Russell Johnson,
a spokesman for Sasol, said in an e-mail.
The economic viability of turning natural gas into fuels
depends on the relationship between oil and gas prices. For a
gas-to-liquids plant to make money, a barrel of oil has to
trade at a ratio of about 16 times the cost of a million
British thermal units of natural gas, Sasol CEO David Constable
said in an interview last year.