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Shell drops plans for $20 billion gas-to-liquids plant in Louisiana

December 10, 2013
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Shell

Oil giant Royal Dutch Shell is shelving plans for the construction of a gas-to-liquids plant in Louisiana that the company revealed in September. Shell is effectively suspending all further work on the project, the company said in a statement.

The project, which would see natural gas turned into jet fuel, diesel and other liquids, was planned to have a maximum capacity of 140,000 barrels per day and was estimated to cost more than $20 billion. In its statement on Thursday Shell pointed out that the plant was eventually deemed too costly, leading to the decision to drop the proposal.

Shell already has a similar plant operating in Qatar, which cost the oil company about $19 billion. Peter Voser, chief executive officer of the company, commented that this was a "tough choice" but Shell had decided to focus its attention and investment on other segments of its portfolio that provide better opportunities for adding value for shareholders.

Although North America can supply large amounts of natural gas to be used in the production process, Shell decided that the Louisiana facility "was not a viable option," taking into account the large costs to build the plant and uncertainty in the long-term prices of oil and gas.

The company pointed out that it was looking forward to further cooperation with the state of Louisiana, and thanked everyone involved in the initial assessment process.

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