Wednesday, January 16, 2013

Another Gas-to-Liquids Plant Targeting Louisiana

Louisiana's bumper crop of natural gas has attracted another end user.  Houston-based G2X Energy announced that it will lease 200 acres on the Industrial Canal at the Port of Lake Charles, LA to build a $1.3 billion natural gas to methanol plant.  G2X will convert approximately 90% of the methanol to gasoline and the remainder to propane.  G2X also announced today that it has licensed Exxon's methanol to gasoline technology.

The G2X press release did not provide any specifics in terms of estimated quantities of natural gas inputs or gasoline outputs.  Looking at construction costs, while $1.3 billion sounds like a lot of dough, it is less than 10% of the construction budget of the neighboring proposed Sasol GTL plant in Westlake, LA, which has passed its feasibility analysis has a construction budget of $16 to $21 billion.

But I'm not complaining.  It is a good thing to expand the market for natural gas into new products and new end users. And it's good for the Haynesville Shale to have another big customer just a short pipeline run away.

The next step in the process is for G2X to conduct a feasibility analysis and make a "go/no go" investment decision by the end of 2013.  If the project is a go, construction would begin in 2014 with estimated completion in early 2017.

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