From Bloomberg News on Thursday:
By Bradley Olson
Royal Dutch Shell Plc (RDSA), Europe’s biggest oil company, 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 barrels a day of liquid fuels and other products normally made from oil, The Hague-based company said in a statement today. Despite ample U.S. gas supplies from a boom in shale production, gas-to-liquids isn’t “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 world’s largest, in Qatar in 2011. South Africa’s Sasol Ltd. (SSL), 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 company’s 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 Johannesburg-based Sasol, said in an e-mail today.
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 Chief Executive Officer David Constable said in an interview last year.
Louisiana had offered Shell a $112 million grant as well as tax incentives for the project, which would have created 740 direct jobs and employed as many as 10,000 construction workers during peak building activity.
Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.
Rig Count Interactive Map by Baker Hughes, an energy services company.
Shale Sheet Fracking, a Youngstown Vindicator blog.
The Ohio Environmental Council, a statewide eco-group based in Columbus.
Earthjustice, a national eco-group.
People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.
Concerned Citizens of Medina County, a grass-roots group.
No Frack Ohio, a Columbus-based grass-roots group.
Fracking: Gas Drilling's Environmental Threat by ProPublica, an online journalism site.
Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.
Allegheny Front, environmental public radio for Western Pennsylvania.