Company would spend a minimum $12.5 billion on potential natural gas-to-liquids facility in Ascension Parish. A proposed natural gas-to-liquids facility that would be built by Shell in Ascension Parish near Sorrento is promising 740 jobs paying an average salary of $100,000 plus benefits. Gov. Bobby Jindal and Shell announced the potential project Tuesday.
According to the terms of an incentive agreement with the state, the Houston-based major (a subsidiary of Royal Dutch Shell) at a minimum would spend $12.5 billion if the project is built, according to a release from the governor's office.
Louisiana Economic Development commissioned an economic impact analysis from LSU that indicates the 740 new direct jobs would result in approximately 3,900 new indirect jobs, for a total of more than 4,600 new permanent jobs in Louisiana. LSU further estimates the project would produce a total economic impact of $77.6 billion over the construction period and the first 15 years of operation.
Shell.com
Shell's Pearl GTL plant in Qatar
At peak building activity, Shell estimates the project would create up to 10,000 construction jobs. A final decision to build the proposed project would be made after site evaluation and preliminary engineering studies are completed.
"For more than six decades, Shell has pursued oil exploration and production in both Louisiana and offshore in the Gulf of Mexico, employing thousands of our people with high-paying energy jobs," Jindal says in the announcement. "Today's announcement is a historic new opportunity for Shell to potentially expand its manufacturing operations onshore in a world-class, gas-to-liquids facility in Ascension Parish on the Mississippi River. 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's Gulf Coast GTL facility would be one of the first of its kind built to commercial scale in the U.S. 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. 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," Jorge Santos Silva, an executive vice president who directs Integrated Gas activities for Shell Upstream Americas, says in the release.
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.
According to the announcement, 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.
The state 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 LED FastStart, the state's premier 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.
Louisiana has cultivated GTL projects with Shell and other global energy companies in recent years, having announced in early September that Juniper GTL will invest $100 million to renovate a dormant steam methane reformer in the Westlake area and convert it to a natural gas-to-liquids facility, producing clean waxes, drilling fluids, diesel and naptha. Juniper GTL will create 29 new direct jobs averaging $85,000 per year, plus benefits. LED estimates the Westlake development will also result in an additional 112 new indirect jobs, for a total of 141 new jobs.
LED says Southwest Louisiana is quickly becoming a hub for GTL facilities. In December, Sasol announced a $16 billion-$21 billion GTL and ethane cracker at its Lake Charles complex that will be the largest manufacturing investment in Louisiana history. In January, G2X Energy announced a $1.3 billion GTL facility at the Port of Lake Charles that will yield chiefly gasoline.
The Juniper GTL project, with a design production of 1,100 barrels per day of clean chemicals and transportation fuels, will be a forerunner of smaller commercial GTL plants. The Juniper GTL project will create an estimated 125 construction jobs, according to LED.
Shell has 40 years of experience in natural gas-to-liquids and 3,500 patents in development. The company 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. Click here to view the gas-to-liquids process.