05 December 2013 21:42 [Source: ICIS news]
HOUSTON (ICIS)--Shell has decided not to build a $12.5bn (€9.25bn) gas-to-liquids (GTL) plant in Louisiana, the company said on Thursday.
Just two months after selecting a site for it, Shell CEO Peter Voser said the first-of-its-kind project in the US had simply become too expensive.
Voser said that the uncertainty of long-term oil and gas prices made GTL “not a viable option” for Shell in North America.
“We are making tough choices here,” Voser said in a statement, “focusing our efforts and capital on the most attractive opportunities in our world-wide portfolio, to add value for shareholders.”
In early October, the company selected a 2,400-acre (972-ha) site in Ascension Parish near Baton Rouge for the 140,000 bbl/day project.
But even then, the international energy giant stipulated that it would be “several years” before the company made a final decision on whether to build the project.
Shell’s plan for the unit was to use natural gas to make cleaner-burning transportation fuels, such as natural gas-based diesel and jet fuels, and also produce specialty waxes and building blocks for lubricants, plastics and detergents.
Shell has built GTL plants outside of the US. The company built its first commercial GTL facility in Malaysia in 1993. Its Pearl GTL facility in Qatar is a joint venture with Qatar Petroleum that began production in 2011.
The Qatar unit processes 1.6bn cubic feet/day of natural gas to produce 140,000 bbl/day of GTL products and 120,000 bbl/day of natural gas liquids (NGLs).
Shell originally estimated that the GTL project would create 740 new direct jobs, about 3,900 new indirect positions and up to 10,000 construction jobs.
The state of Louisiana offered Shell a performance-based grant of $112m to reimburse costs associated with public road improvements, land acquisition and other infrastructure costs.
($1 = €0.74)
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
Asian Chemical Connections