Shell has entered into an incentive agreement with the State of Louisiana for a potential natural gas-to-liquids (GTL) project in Ascension Parish.
If the company goes ahead with the project, the agreement requires them to shell out at least $12.5 billion for the project.
Shell has also committed to creating a minimum of 740 new and direct jobs if the project is greenlighted. These would be high-paying jobs with average annual wages of around $100,000, plus benefits.
Louisiana State University (LSU) performed an economic impact analysis for the project, and found that the project would support the creation of another 3,900 indirect jobs. Not to mention 10,000 construction jobs at the peak building activity level.
Shell’s $12.5 billion GTL plant would have an overall economic impact of $77.6 billion in Louisiana, including over the construction phase and the first 15 years in which the facility will be operational.
Another noteworthy aspect of this GTL facility is that it will be the first of its kind to be commercially scaled in the U.S. The plant will use natural gas as the raw material to create clean fuels used for transportation, along with specialty waxes, and building blocks for plastics, detergents and lubricants.
Jorge Santos Silva, executive vice president, Royal Dutch Shell, who directs the Upstream Americas Integrated Gas Division, said that selecting the site was an important first step that would allow the company to go ahead with detailed planning and technical analysis, and get started with the permitting process.
He said that if Shell goes ahead with the project, they expect the project costs to be well above the minimum spending level agreed upon with Louisiana.
In return, Louisiana has agreed to provide a massive $112 million package of incentives for land acquisition, road expansions and other infrastructure improvements.
For starters, road improvements associated with the GTL project are expected to add up to around $32 million. Shell will provide funding for these road improvements, and will be reimbursed by the State through infrastructure grants based on performance.
Shell will be eligible for incentives under Louisiana’s Industrial Tax Exemption Program. They will get a 12 percent payroll rebate per job created under the Competitive Projects Payroll Incentive Program. LED FastStart will assist the company with workforce training.
Louisiana has become a hotbed of proposed GTL projects, with Shell following in the wake of earlier announcements made by Sasol ($16-$21 billion GTL and ethane cracker complex), G2X Energy ($1.3 billion GTL), and Juniper ($100 million GTL).