Shell selects Louisiana site for $12.5 billion, world-scale GTL facility

Royal Dutch Shell PLC, in a joint press statement with the state of Louisiana, reported the selection of Ascension Parish as a potential location for a $12.5 billion gas-to-liquids (GTL) facility. If built, the plant, to be located near Sorrento, La., would be one of the first commercial-scale plants of its kind in the US.

The project also would create 740 direct jobs, according to an incentive agreement with the state.

A decision on whether to begin construction of the facility is pending the completion of site evaluation and preliminary engineering studies, which would take several years, Shell said.

“Selecting a site is an important step that allows us to conduct more detailed planning, technical analysis, and begin the permitting process,” said Executive Vice-Pres. Jorge Santos Silva, who directs integrated gas activities for Shell Upstream Americas. “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,” he added.

Shell’s presence in the Gulf Coast region includes extensive onshore facilities in Louisiana, including its Norco and Geismar plants, a major training center in Robert, and corporate offices in New Orleans. The company produces 150 million bbl of oil annually from the Gulf of Mexico.

Shell would invest an estimated $32 million in road improvements to alleviate traffic accompanying the construction and operation of the facility, the joint press statement said. Construction is slated to start this year and finish in 2016. The state of Louisiana would reimburse Shell for costs related to necessary public road improvements, land acquisition, and other infrastructure costs with a performance-based grant of $112 million as part of an incentive package.

Shell built the first commercial GTL facility in Bintulu, Malaysia, in 1993. Then in 2011, Shell, in a joint venture with Qatar Petroleum, began production from the Pearl GTL facility in Ras Laffan, Qatar, which is capable of producing 140,000 b/d of GTL products and remains the world’s largest commercial GTL plant (OGJ Online, June 11, 2011).