Shell will not pursue US Gulf Coast GTL project

Royal Dutch Shell plc

Royal Dutch Shell plc (Shell) has decided not to move forward with the proposed 140,000-bpd Gulf Coast gas-to-liquids (GTL) project in Louisiana and will suspend any further work on the project.

Despite the ample supplies of natural gas in the area, the company said that GTL is not a viable option for Shell in North America at this time, due to the likely development cost of such a project, along with uncertainties on long-term oil and gas prices and differentials, and Shell’s strict capital discipline.

Global Hunter Securities noted that FuelFix reported the proposed Shell project would have required an investment of more than $20 billion. Shell would have been required to purchase natural gas locally and would therefore face price risk, unlike with its large GTL plant in Qatar, where Shell also owns the natural gas used in the GTL plant.

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