WESTLAKE, La. The company, Sasol, which is based in Johannesburg, has been a pioneer in a technology that has tantalized energy scientists for decades over its potential to produce liquid fuels without using oil, which has historically cost far more than natural gas.
Having already built smaller plants in South Africa and Qatar, Sasol designed its new Louisiana plant to produce 96,000 barrels of fuel a day using its gas to liquids, or GTL technology. It will be the second-largest plant of its kind in the world after Royal Dutch Shells Pearl plant in Qatar, and will cost $11 billion to $14 billion to build.
By incorporating GTL technology in the USAs energy mix, states such as Louisiana will be able to advance the countrys energy independence through a diversification of supply, David Constable, Sasols chief executive, said at a news conference here Monday near the projects planned location.
The facility will include a gas processing plant, a chemical plant and a refinery. All are required to perform the alchemy of converting natural gas into diesel, jet fuel and other chemical products.
What makes this southwestern corner of Louisiana attractive to Sasol is its proximity to the bountiful shale gas fields to the north and in Texas. A boom in shale drilling has reduced the price of natural gas in the United States in the last four years by more than two-thirds, encouraging many energy and chemical companies to build and expand manufacturing plants around the Gulf of Mexico to produce a variety of petrochemicals.
Sasol estimated that the plant would create at least 1,200 permanent jobs and 7,000 construction jobs. Production is scheduled to begin in 2018. The state encouraged the project with more than $2 billion worth of tax credits and other incentives.
At the news conference Monday, Gov. Bobby Jindal said the project would be the largest manufacturing project in the history of Louisiana and one of the largest ever in the United States. The global financial markets will be watching, he said.
Don Hertzmark, an international energy consultant who has worked on gas-to-liquids and other natural gas projects for 30 years cautions, These plants are only economic with very low gas prices.