Anglo-Dutch oil giant Shell has abandoned plans to build a US 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,” it said in a statement issued late on Thursday.
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.
– Dow Jones Newswires contributed to this report –