Friday, April 6, 2012

Shell Looking at Gas-to-Diesel in Louisiana?

In another sign of long-term benefits from the shale gas revolution, the Wall Street Journal reported yesterday that Royal Dutch Shell is evaluating building a gas-to-diesel processing plant along the Gulf Coast, possibly in Louisiana.  The article cited anonymous sources and did not offer specifics about possible locations.  Currently, Sasoil Ltd. is evaluating a gas-to-liquids plant adjacent to its existing chemical plant near Lake Charles, LA.

The proposed plant would entail an investment of around $10 billion and would be similar in size to the company's Pearl plant in Qatar.  According to the article, Shell thinks it has learned enough from Pearl to reduce the capital investment from the $18 billion spent on Pearl.

If this proposed plant goes forward, it is still years from coming online, but the discussion of multi-billion dollar investments it is a strong statement that shale gas has changed the energy landscape and is likely to cause huge ripples in chemicals and manufacturing in the coming decades.

While there are many skeptics out there who say that shale gas estimates are overblown, seeing Shell, an operator in the Haynesville Shale, making such possible moves gives me confidence in the industry's projections for shale gas. Shell exuded that same confidence when it picked a site in SW Pennsylvania for an ethane cracker plant because of its access to the Marcellus Shale.

2 comments:

Carly Pride said...
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Carly Pride said...

This will definitely make a drastic change in the production of oil. Shale gas is a natural gas which is a great replacement for fossil fuel and by using it will reduce greenhouse gas emission.
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