Shell has selected Ascension Parish in Louisiana 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 at a minimum would spend $12.5 billion and create 740 direct jobs, should the project be built.
Shell’s Gulf Coast GTL facility would be one of the first of its kind built to commercial scale in the United States. As a leading producer in the Gulf of Mexico with approximately 150 million barrels of oil each year, Shell also operates extensive onshore facilities in Louisiana, including its Norco and Geismar plants, a major training center in Robert, and corporate offices in New Orleans.
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.
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 state workforce training program LED FastStart. In addition, the company would qualify for Louisiana’s new Competitive Projects Payroll Incentive (12% payroll rebate for each GTL job), as well as the Industrial Tax Exemption Program.
Louisiana has cultivated GTL projects with Shell and other global energy companies in recent years.
Shell built the first commercial GTL facility in Malaysia in 1993. In 2011, Shell began production at Pearl GTL in Qatar, a joint venture between Shell and Qatar Petroleum, the world’s largest GTL plant.