Royal Dutch Shell has picked a site in Louisiana for a plant costing at least $12.5 billion that would turn natural gas into diesel, jet fuel and other liquids, the Louisiana governor’s office announced Tuesday.
Shell said the project, which is no sure thing, could help to harness more domestic natural gas to make transportation fuels. The company will continue to consider the option before making an investment decision at the site in Ascension Parish, Louisiana, according to the news release.
The plant would offer the benefit of displacing oil used to make fuels and other products and lowering emissions, since Shell says liquids produced from natural gas burn cleaner than those produced from oil.
It also would create at least 740 direct jobs with an average salary of $100,000, as well as at least 3,900 indirect jobs, according to the announcement. Louisiana State University estimates the project would have an economic impact of $77.6 billion over the construction period and the first 15 years of operation of the plant, according to the press release.
“Today’s announcement is a historic new opportunity for Shell to potentially expand its manufacturing operations onshore in a world-class, gas-to-liquids facility in Ascension Parish on the Mississippi River,” Louisiana Gov. Bobby Jindal said in a statement. “Here in the heart of Louisiana’s world-scale petrochemical industries, the Gulf Coast GTL project would give thousands more of our people an opportunity for a rewarding career right here at home.”
Louisiana offered Shell an incentive of $112 million, according to the release.
“The State of Louisiana offered Shell a competitive incentive package that would include a performance-based grant of $112 million to reimburse costs associated with necessary public road improvements, land acquisition and other infrastructure costs,” the state said in the press release.
The plant would be the latest effort to use more domestic natural gas. Power plants, chemical plants and planned export facilities are all looking to harness the resource.
Shell has also committed to expanding the availability of natural gas for transportation, by creating small-scale plants to liquefy the fuel for use in trains, trucks and marine vehicles. The company also is planning to supply liquefied natural gas to 100 refueling stations across the country.
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A gas-to-liquids facility would add to the company’s efforts to increase the use of natural gas and further displace oil used to make fuels and other liquids.
It also could result in well more than the minimum planned $12.5 billion investment and 740 permanent jobs that Shell has told Louisiana the project will create.
“Should we move forward with the project, we expect project costs to be well in excess of the minimum spend that was agreed upon with the State of Louisiana,” Jorge Santos Silva, Shell’s executive vice president directing integrated gas activities for Shell Upstream Americas said in a statement. “We look forward to working with our prospective neighbors and other interested parties. Through it all, we are committed to keeping people safe, protecting the environment and being a good neighbor.”
Shell long has worked to use natural gas as a substitute for oil when it comes to producing transportation fuels, lubricants and other liquids. The company holds 3,500 patents related to the technology and opened its first commercial gas-to-liquids facility in Malaysia in 1993.
Shell also began full production at the world’s largest gas-to-liquids plant last year in Qatar. The facility, called Pearl GTL, cost more than $18 billion and turn 1.6 billion cubic feet of natural gas per day into other products.
“The more we use domestically abundant natural gas reserves for transportation and other uses, the less we would need to rely on imported oil,” Shell says on its website.
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