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Linn Energy, LLC Message Board

  • rlp2451 rlp2451 Dec 4, 2012 8:43 AM Flag

    Sasol Takes $11B Gamble on Louisiana Coast

    Who says there aren't companies willing to commit billions of dollars in the US?

    In an ambitious bet that the glut of cheap natural gas in the United States will last for many years, a South African energy company announced on Monday that it would build America’s first commercial plant to convert natural gas to diesel and other liquid fuels.

    The company, Sasol, which is based in Johannesburg, has been a pioneer in a technology that has tantalized energy scientists for decades over its potential to produce liquid fuels without using oil, which has historically cost far more than natural gas.

    Having already built smaller plants in South Africa and Qatar, Sasol has designed its new Louisiana plant to produce 96,000 barrels of fuel a day using its “gas to liquids,” or G.T.L., technology. It will be the second-largest plant of its kind in the world, after Royal Dutch Shell’s Pearl plant in Qatar, and will cost $11 billion to $14 billion to build.

    With modest construction cost overruns, companies could make a decent profit on a gas-to-liquids plant. He said that at today’s price for natural gas in the United States, about $3.60 per thousand cubic feet, a company would need a retail price for diesel fuel of more than $4 a gallon — near the average price today — to make the process profitable.

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