Houston-based G2X Energy Inc. is drawing up plans to build a natural gas-to-gasoline facility in Louisiana using methanol conversion technology developed by a subsidiary of ExxonMobil Corp.

The estimated $1.3 billion facility would use natural gas to produce methanol, then convert the methanol to gasoline for 90% of its production. About 10% of the output would be liquefied petroleum gas or propane.

"Our natural gas-to-gasoline conversion process -- developed and backed by one of the world's largest energy companies -- is a proven solution for the clean and economic production of transportation fuels from abundant domestic natural gas," said G2X CEO Timothy Vail.

G2X, which develops advanced gas-to-gasoline projects, plans to use methanol-to-gasoline (MTG) technology developed by an ExxonMobil subsidiary to develop the "world scale" project. The company said it is the first to secure a long-term, multi-site agreement with ExxonMobil Research and Engineering Co. (EMRE) for gas-based MTG projects.

The project would take advantage of North America's surplus gas supplies, Vail said. EMRE's MTG technology, coupled with G2X's capabilities, would allow gas producers to convert methanol directly into transportation fuel. The EMRE technology "will enable us to economically produce gasoline from natural gas," said Vail.

The company plans to use the technology and leverage its partnership with the Proman Group, a process plant engineering and operating company, to create a platform to expand the natural gas role in the existing transportation fuels market. Gasoline produced by G2X would require "no further refining or processing prior to direct blending into gasoline." The fuel produced could be used in existing vehicles and distributed using current infrastructure.

G2X officials now are working on an option to lease 200 acres of land owned by the Port of Lake Charles on an industrial canal and the Calcasieu Channel, where gasoline could be shipped by pipeline or tanker. The company is eyeing a site near Trunkline LNG, which is a major tenant at the port.

Subject to the feasibility analysis and the ability to obtain facility permits, G2X officials expect to make a final investment decision by the end of this year. Construction would begin in 2014, with a start-up in early 2017.

The project is expected to create close to 250 direct jobs, with salaries averaging $66,500 a year, G2X said. The Louisiana Department of Economic Development (LED) estimates that the project would result in 748 indirect jobs, creating close to 1,000 permanent jobs.

The LED began negotiating with G2X at the end of December, offering a $5 million performance-based grant for infrastructure improvements at the port to include an access road, utilities and a dock facility. G2X also may use the state's Quality Jobs and Industrial Tax Exemption incentives.

"Once again the Calcasieu River Ship Channel has proven to be a valuable asset to our region's growth and success," Port Executive Director Bill Rase said. "...G2X has chosen to bring its innovative conversion technology to Southwest Louisiana's energy corridor, and the port's board of commissioners welcomes its newest corporate citizen."

A host of natural gas-related projects are on the drawing board for the Gulf Coast, with several slated for Louisiana. The biggest announced to date is Sasol Ltd.'s plans to construct a $16-21 billion gas-to-liquids plant in Westlake, LA, which would be the second largest of its kind in the world (see Daily GPI, Dec. 4, 2012). Last year Dow Chemical Co. set in motion plans to invest $4 billion in Texas and Louisiana through 2017 (see Daily GPI, Dec. 12, 2012). ExxonMobil also is spending close to $200 million to expand two chemical and lubricant plants in Baton Rouge and Port Allen, LA.

"Louisiana is an energy-rich state, and we're proud of that heritage," Louisiana Gov. Bobby Jindal said. "In order to keep our energy industry strong, we have made a serious commitment to aggressively pursue companies that want to invest in Louisiana and create jobs here for our people."

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