Processing Magazine

‘Giant’ Louisiana plant will convert natural gas into diesel fuel

April 5, 2012

Royal Dutch Shell PLC is considering building a giant plant in Louisiana that would convert natural gas into diesel fuel, reports from the Wall Street Journal and other media sources say.

The plant, which could cost more than $10 billion, would be similar in size to Shell''s Pearl gas-to-liquids facility in the Mideast nation of Qatar, sources for the story say. Pearl, which went into operation last June, turns natural gas into enough diesel to fill more than 160,000 cars a day.

Shell declined to comment on its plans. The Journal reports that the Anglo-Dutch company is expected to take up to two years to develop detailed engineering plans to determine if the plant is economically viable before submitting the project for approval by the company''s board.

As is well known, Shell''s plans are the latest sign that companies are seeking new ways to exploit extensive natural-gas discoveries in the U.S. The boom in gas production from shale has sent natural-gas prices down 50% over the past year to slightly over $2 per million British thermal units, the lowest level in a decade. Diesel prices are near a record, up 4% from a year ago, the Journal reports.