Shell Eying Sites For U.S. GTL Plant

December 2012, Vol. 239 No. 12

Despite persistently low natural gas prices, Shell hopes to boost profits by converting natural gas into diesel and other fuels, press reports indicate. While many of its competitors want to exploit the low prices by exports to Asia or Europe, Shell said it wants to bring its expertise in gas-to-liquid fuels into the U.S. fuel market.

Though it avoids the need for export permits, the process is still complex because it is more capital-intensive than investing in LNG infrastructure for exports. Shell’s Pearl GTL project in Qatar, which chemically converts natural gas into premium diesel and chemical feedstocks, cost $18 billion and took five years to build. It went online last year, but is taking longer than expected to run at full capacity.

Shell Chief Financial Officer Simon Henry said the company is looking at Louisiana and Texas as possible sites for a plant producing at least 70,000 bpd of liquids from natural gas. Shell is at least two years away from making a final investment decision and then another four to five years away from production, he said.

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