Posted by Heidi Schwartz
Authorities at Shell have announced the selection of Ascension Parish, LA as the location for a potential natural gas-to-liquids (GTL) facility. According to the terms of an incentive agreement with the state, the company would spend at least $12.5 billion and create 740 direct jobs, should the project be built. A final decision to build the proposed project would be made after site evaluation and preliminary engineering studies are completed. Construction would follow that decision.
Louisiana Gov. Bobby Jindal said, “Here in the heart of Louisiana’s world-scale petrochemical industries, the Gulf Coast GTL project would give thousands more of our people an opportunity for a rewarding career right here at home. We know that the final investment decision is yet to come, but we also know that Shell’s selection of Louisiana proves once again that there’s no better place in the world for major business investment. Shell joins many companies who are expanding in Louisiana because of our strong business climate, outstanding energy and chemical infrastructure and our highly skilled workforce.”
Shell’s Gulf Coast GTL facility in Sorrento, LA would be one of the first of its kind built to commercial scale in the United States. If built, the proposed project would use natural gas to create cleaner burning transportation fuels, such as natural gas-based diesel and jet fuels and other products, such as specialty waxes and the building blocks for lubricants, plastics and detergents. As part of America’s energy mix, GTL technology can help the U.S. meet its growing transportation needs while advancing the nation’s energy security.
“Selecting a site is an important step that allows us to conduct more detailed planning, technical analysis and begin the permitting process. 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,” said Executive Vice President Jorge Santos Silva, who directs Integrated Gas activities for Shell Upstream Americas. “We look forward to working with our prospective neighbors and other interested parties. Through it all, we are committed to keeping people safe, protecting the environment and being a good neighbor.”
An estimated $32 million in road improvements associated with the proposed GTL project will address traffic generated by the construction and operation of the facility. The Louisiana Department of Transportation and Development will begin moving forward this year with projects that benefit the industry and those who travel throughout St. James and Ascension parishes. Based on the status of its project evaluation, Shell would fund new road projects, including new turning lanes, expansion of Louisiana Highway 22 to four lanes from Interstate 10 to Louisiana Highway 70 and expansion of Louisiana Highway 70 to four lanes from that intersection to the Sunshine Bridge. The improvements currently are targeted for completion in the fall of 2016. Contingent on a final decision to move forward with the Gulf Coast GTL project, Shell would be reimbursed for this total cost from performance-based infrastructure grants provided by the State of Louisiana.
The State of Louisiana offered Shell a competitive incentive package that would include a performance-based grant of $112 million to reimburse costs associated with necessary public road improvements, land acquisition and other infrastructure costs. Shell also would receive the services of the LED FastStart® workforce training program. In addition, the company would qualify for Louisiana’s new Competitive Projects Payroll Incentive (12 percent payroll rebate for each GTL job), as well as the Industrial Tax Exemption Program.
Shell is a demonstrated leader in natural gas-to-liquids, with 40 years of experience and 3,500 patents in development. In 2011, Shell began production at Pearl GTL in Qatar, a joint venture between Shell and Qatar Petroleum, the world’s largest GTL plant.