Shell thinking of building Diesel fuel conversion plant in U.S.

  • Today - Wednesday, April 4, 2012

  • RDS.A
    6:36 PM Royal Dutch Shell (RDS.A) is considering building a giant plant in Louisiana that would convert natural gas into diesel fuel, WSJ reports. The plant, which could cost more than $10B, would be similar in size to Shell's new gas-to-liquids facility in Qatar, which turns natural gas into enough diesel to fill more than 160,000 cars a day.
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  • What a novel idea to build it where it is.........................

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2s72s0k9mm8gdPermalink Reply by 2s72s0k9mm8gd on April 5, 2012 at 1:01pm

Amazing to me! What else can be made from Natural Gas?

Any chemistry majors out there who care to make a list?

Permalink Reply by HB on April 5, 2012 at 3:11pm

Gas To Liquids (GTL) plants are usually based on FT technology, which produces a wax-like product.  The wax is then sent through normal refinery operations to crack it to lighter hydrocarbons such as diesel, kerosene/jet fuel, etc.  These lighter HCs could be dehydrogenated to olefins and thus used for polymer  (ie. rubber & plastics) feedstocks.  But a lot of this depends on economics.  While many things can be made from gas via GTL, there are usually cheaper sources for many of the potential products.

Retired research chemist

Permalink Reply by Jack Straw on April 5, 2012 at 5:31pm

RE: "While many things can be made from gas via GTL, there are usually cheaper sources for many of the potential products."

All you state is accurate. GTL ONLY makes sense is situations where stranded gas otherwise has little value (as in the case with Qatar where the alternative is the expensive alternaltive of converting to LNG and shipment to Japan/Korea). Right now, the situation is one of stranded gas within the US/Canada - with Natural Gas selling at many hubs at less than $2/mcf ( 1/10th the value of Brent or Louisiana Light Sweet when measured on a BTU basis). Natural Gas (stranded in US/Canada) is currently a remarkably cheap feedstock (on that forementioned BTU basis; and that situation is likely to exist for perhap three (or more) years).
In addition to Shell's proposed GTL project in Louisians, SASOL are proposing a GTL project for Canada (where natural Gas in Alberta AEC Hub sells at a price lower than Henry Hub).
The upside of GTL is that it produces an ultra-clean Diesel  (that sells at a significant premium in Europe).
I find the plans of Shell and SASOL to be telling (with regards their respective future vision of the availability (surplus) of natural gas in US/Canada. The costs of a GTL plant are huge; no one bets such sums lightly.
 
I welcome your further comments/insights.
 
JS
 
All IMHO,
                 JS
Permalink Reply by Philip Brutz on April 5, 2012 at 1:46pm

Maybe our Governor should try and convince them to build it here.

2s72s0k9mm8gdPermalink Reply by 2s72s0k9mm8gd on April 5, 2012 at 1:48pm

Yes! It would look real nice right beside the cracker plant!

Permalink Reply by Neal Franks on April 5, 2012 at 2:26pm

This technology would appear to be an outgrowth of the German chemical industry during WW II and in some quarters it's called by its inventors, Herr Fischer and Herr Tropsch.  The South Africans perfected it, using coal as the raw material, during the time they were unable to acquire crude oil on the world market.  More recently, they have adapted it to use natural gas and have a joint facility with Oryx in Qatar producing some volumes of diesel and jet fuel using the excess of natural gas in the middle east.  Sasol was allegedly considering constructing a facility to achieve this conversion in Louisiana.

Permalink Reply by Jim Litwinowicz on April 5, 2012 at 2:50pm

Seems strange to me.  Why not take half the money and use the $5B to covert trucks to run on LNG or CNG? It would be cheaper, quicker, and cleaner. Less risky. Easier. And you wouldn't have to ship the nat gas to the plant or ship the end product to market.

Nat gas is so widespread with more than 15 shale plays that much of it can be produced right where it is needed.

Permalink Reply by Jack Straw on April 5, 2012 at 5:49pm

I would argue that that the US (and Canada) have sufficient reserves of Natural Gas (and Natural Gas Liquids) to do CNG, LNG, GTL and provide feedstock for Dow, Dupont, Fertilizer and other chemical enterprises.

The potential surplus US/Canadian Natural Gas has the potential to revitalize US/Canadian industries (jobs)- baring Government interferance - that is a big caveat). The jobs produced would be well paying jobs - not minimum wage service industry employment.

All IMHO,

                JS

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