Shell Scraps US Gulf Coast Project

Shell Scraps US Gulf Coast Project

High cost of facility, $20 billion, not feasible for gas-to-liquid project.

LONDON -- Shell (IW 1000/1) has abandoned plans to build a U.S. facility to convert natural gas into diesel and other fuels, citing high costs.

"Royal Dutch Shell plc ... announces that the company will not move forward with the proposed 140,000 barrels per day Gulf Coast gas-to-liquids (GTL) project in Louisiana and will suspend any further work on the project," the company said.

The London-listed group added: "Despite the ample supplies of natural gas in the area, the company has taken the decision 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, uncertainties on long-term oil and gas prices and differentials, and Shell's strict capital discipline."

Shell's latest cost estimate to build the facility topped $20 billion (14.6 billion euros), which compared with a figure of $12.5 billion that was given in September.

Copyright Agence France-Presse, 2013

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