Dive Brief:
- South Africa-based chemical and energy company Sasol has abandoned its plans for a $15 billion gas-to-liquids (GTL) factory near Lake Charles, LA, according to The Advocate.
- The company said the project's feasibility depended on a wide gap between natural gas and crude oil prices, and the fall of the latter gave Sasol, which would have converted natural gas to diesel at the facility, little chance of recouping its investment. Sasol monitored the trend in oil prices for nearly three years before making its decision.
- The GTL facility would have generated 750 full-time jobs at an average pay rate of $88,000 per year. The company said it would focus now on an $11 billion ethane cracker plant it already has under construction at the Lake Charles site.
Dive Insight:
According to the U.S. Energy Information Administration's International Energy Outlook 2017, the most popular gas-to-liquids conversions are those that see natural gas turned into diesel, gasoline and waxes. The EIA said that GTL plants around the world produce about 0.2% of these liquids, which translates to about 230,000 barrels per day. OilVoice reported that more than 90% of GTL production, as of the beginning of 2017, comes from two facilities in Qatar, one in South Africa and one in Nigeria.
Despite the negative impact oil prices have had on GLT plant construction, ethane cracker plant development seems to be trending up.
Like Sasol, Shell Chemicals has made a massive investment in ethane and is currently underway with construction of a $6 billion cracker plant in Potter Township, PA. The company, which will put out about 1.6 million tons of polyethylene every year, is expected to employ about 6,000 construction workers when building activity is at its peak. In addition to the cracker plant itself, the complex will also include an office building, a natural gas-fired power plant, cooling tower and water treatment plant. Shell has also been working on infrastructure improvements — bridges and roads — around the new facility.
ExxonMobil and Saudi Arabia-based Sabic have also entered the ethane cracker business under the joint venture of Gulf Coast Growth Ventures. Construction on Gulf Coast's $10 billion ethane steam cracker plant just north of Corpus Christi, TX, is expected to kick off in 2019, but the JV has already awarded 13 contracts for the project, 12 of which went to local firms. Once complete, that plant will be the largest such facility in the world.
