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Despite the relative success of Qatar’s two gas-to-liquids (GTL) plants, large-scale GTL isn’t making significant inroads on a global scale.
At the end of 2013, Shell abandoned plans to build a 140,000 b/d, $20bn GTL facility in Louisiana on the US Gulf Coast. “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,” the company said at the time.
There are certainly legitimate concerns regarding the economics of large-scale GTL in the United States and elsewhere around the world. But with cheap and abundant gas supplies in the United States and the premium GTL products typically fetch, Shell’s move suggests that increasingly cautious IOCs will hesitate to front the very significant capital costs of constructing large-scale GTL plants.
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