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MarkWest Energy Partners, L.P. Message Board

  • chrxind chrxind Sep 25, 2013 11:25 PM Flag

    Shell Proposes a GLT Plant in LA

    Downstream Today 25 Sept 2013:

    Shell has proposed building a $12.5 billion natural gas-to-liquids (GTL) facility near Baton Rouge, La., according to a joint statement Tuesday by Shell and Louisiana Gov. Bobby Jindal.
    "Selecting a site is an important step that allows us to conduct more detailed planning, technical analysis and begin the permitting process," stated Jorge Santos, Shell executive vice president who heads Integrated Gas activities for the company's Upstream Americas business. "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."

    The GTL facility, which would be built in Ascension Parish, would produce transportation fuels such as diesel and jet fuels, according to the announcement. In addition, the plant reportedly would manufacture other products such as specialty waxes and the building blocks for lubricants, plastics and detergents.
    "This comes at an unprecedented time for the oil and gas industry in Louisiana," remarked Chris John, president of the Louisiana Mid-Continent Oil and Gas Association, in a press statement released by the organization. "With the ample supply of natural gas in America, this project is a perfect fit for both parties and will provide critical products to the country."

    Will PA get a cracker or not is the question, 12.5 billion is a good chunk of change.

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    • It's interesting that one of the areas mentioned by MWE as a site for the proposed KMP/MWE JV fractionation area on the Gulf Coast is Louisiana. It would make perfect sense for the JV to locate next door to the proposed Shell GTL plant. Produce ethane and ship it next door to Shell. Another illustration of the changes coming is the Moneyonomics post of Westlake Chemical conversion of its' ethylene plant from propane to ethane as a feedstock. Economically, this makes perfect sense. Propane sells for more than $40/barrel; ethane is around $10/barrel. And location is important,too: the Westlake plant is located in the far western part of Kentucky..but if you check the path of the ATEX ethane pipeline from PA to TX you'll find that It passes reasonably close to that plant. What ATEX has done IMO is opened a 1000+ mile swath of ethane availability to all chemical manufacturers interested in an inexpensive feedstock. The KMP/MWE JV pipeline will do the same thing. We're I She'll I would cancel the PA cracker and locate it in the South where land is cheaper and more is available, the work force is non union, and the weather a lot better for sustained operations. Another note is that seeing GTL plants being built in the USA is phenomenal. You normally think of GTL in oil lacking countries like Germany in WW II, South Africa etc..that relatively political stable USA is awash in low priced. Natural gas liquids is really going to have a global impact.

    • I don't think it will have anything to do with the pa Cracker. Sasos (South African Company) is also in the process of planning to build one on the Gulf. A few years ago Shell was talking about building one in the NE. I read recently that the process for these plants have been improved greatly with better catalysts which greatly reduces the cost. The same article speculated there may be more of these built with a projected lower cost. The one Shell built in the Middle East came in at $20 billion. It was way over budget. I should think something like this would be a natural in a place like the Bakken where all the associated oil gas is being flared off.

      • 1 Reply to intarzletrol
      • I hope your correct. I am more encouraged now that there appears to be sufficient local ethane for the plant. Would like to see new plants like this in the local area get built. Anyway 3rd quarter earnings are upcoming and good chance we could get more news related to Shells bidding for additional ethane feedstock. Thinking strongly that RRC via MWE will be a part of that; all infrastructure is now in place with Liberty - Mariner now in operation and only perhaps right in the area of the now Horse Head - future Shell ethane cracker location.

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