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Ohio Utica Shale

South African energy company to turn natural gas to diesel

By Bob Downing Published: December 3, 2012

From New York Times:

In an ambitious bet that the glut of cheap natural gas in the United States will last for many years, a South African energy company announced Monday that it would build America’s first commercial plant in Louisiana to convert natural gas to diesel and other liquid fuels.

Having already built smaller plants in South Africa and Qatar, Sasol has designed its new Louisiana plant to produce 96,000 barrels of fuel a day using its "gas to liquids," or GTL, technology.

It will be the second-largest plant of its kind in the world, after Royal Dutch Shell’s Pearl plant in Qatar, and will cost $11 billion to $14 billion to build.

The facility will include a gas processing plant, a chemical plant and a refinery. All are required to perform the alchemy of converting natural gas into diesel, jet fuel and other chemical products.

What makes this southwestern corner of Louisiana attractive to Sasol is its proximity to bountiful shale gas fields.

Sasol estimated that the plant would create at least 1,200 permanent jobs and 7,000 construction jobs. Production is scheduled to begin in 2018. The state encouraged the project with more than $2 billion worth of tax credits and other incentives.

The company said it would put off previously announced plans to build a separate gas-to-liquids plant in Canada, giving priority to the Louisiana effort.

Profits have been elusive for the technology. To make it work, natural gas prices must remain low and prices for oil, diesel and jet fuel must remain high for a prolonged period.

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ODNR Division of Oil and Gas Resources Management. State drilling permits. List is updated weekly.

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Marcellus and Utica Shale Resource Center by Ohio law firm Bricker & Eckler.

Utica Shale, a compilation of Utica shale activities.

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Fracking: Gas Drilling's Environmental Threat by ProPublica, an online journalism site.

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