MIYANVILLE: South African Energy Firm Explores Cajun Country
09.21.11 | NEWS CLIPPING
A South African energy and chemicals company is planning to invest $8 billion to $10 billion to build the first plant in the US to convert natural gas to diesel fuel.
Sasol Limited (SSL) has begun an 18-month feasibility study on a site in Calcasieu Parish, in southwestern Louisiana, according to news site AllAfrica.com.
A Zacks.com analyst wrote that the project “could be the start of a major movement to effectively substitute abundant, cheap natural gas produced with North America for expensive, imported crude oil.” He noted the “chicken-and-egg” problem that has stymied the industry: Vehicles must be adapted to run on compressed natural gas, and they must have a place to fuel up.
The project would exploit the widening difference in cost between imported oil and shale gas reserves. Shale gas, which the US has in abundance, costs about one-fifth as much as oil to process for commercial use, according to the Financial Times.
The technology used by the company, called gas-to-liquids or GTL, converts natural gas into diesel and jet fuels. Sasol claims its gas-to-liquids technology produces fuel that burns cleaner than conventional diesel.
At a press conference with Louisiana Gov. Bobby Jindal, Sasol business development director Ernst Oberholster said his company’s proprietary GTL technology “can help unlock the potential of Louisiana’s clean and abundant natural gas resources and contribute to an affordable, reliable and high quality fuel supply for the United States.”
In a statement, Gov. Jindal said the project would be “one of the largest industrial projects in Louisiana history.” An estimated 850 permanent jobs would be created by the plant.
Sasol already operates two chemical plants near the proposed site, and owns the land on which it hopes to build the new plant.
The company last week reported earnings growth of 24.5% for the year ended June 30, mostly due to increasing fuel prices. It cited the strength of South Africa’s rand currency as its biggest threat to growth in the year ahead.