South Africa’s Sasol Ltd. on Monday made a long-term bet on the viability of U.S. natural gas in announcing plans to construct a $16-21 billion natural gas-to-liquids (GTL) plant in Westlake, LA — the second largest commercial plant of its kind in the world.

The U.S. plant would produce up to 96,000 b/d, making it the second largest of its kind after Royal Dutch Shell plc’s Pearl plant in Qatar (see Daily GPI, March 25, 2011). The Sasol plant would be in southwestern Louisiana, which is in the heart of the gassy Haynesville Shale, and near the Barnett and Eagle Ford plays.

“By incorporating GTL technology in the USA’s energy mix, states such as Louisiana will be able to advance the country’s energy independence through a diversification of supply,” said Sasol CEO David Constable.

The Westlake facility would include a gas processing plant, a chemical plant and a refinery to convert natural gas into diesel, jet fuel and other chemical products.

“This project will be the largest single manufacturing investment in the history of Louisiana and it also represents one of the largest foreign direct investment manufacturing projects in the history of the entire United States,” Louisiana Gov. Bobby Jindal said. “Despite a national economic downturn, this historic economic development win is happening in Louisiana because we have been laser focused on job creation by creating an environment where businesses want to invest and create jobs for our people.”

An estimated 1,200 permanent jobs and 7,000 construction jobs are forecast to be created by the project, with construction start-up to begin in 2014. Production is slated to begin in 2018. Louisiana offered Sasol more than $2 billion in tax credits and other incentives.

Sasol, a global pioneer in GTL technology, first leaked plans for a possible Louisiana project last year (see Daily GPI, Dec. 11, 2011). It also has been studying plans to build a GTL facility in Canada; it already has small GTL facilities in South Africa and Qatar. However, the Canadian plans have been shelved to prioritize the Louisiana facility.

Sasol’s announcement is the first — and the largest — to become “official,” but the company isn’t the only one that has been reviewing projects to take advantage of unconventional gas supplies along the Gulf Coast. Last year Dow Chemical Co. launched plans to increase ethylene and propylene production, as well as integrate U.S. operations, into feedstock “opportunities” available from the increasing gas supplies (see Daily GPI, April 25, 2011). Westlake Chemical Corp. has said it wants to expand ethane crackers in Louisiana. Last spring Chevron Phillips Chemical Co. LP selected Old Ocean, TX, as the site for two polyethylene facilities (see Daily GPI, May 1).

Shell also is considering a GTL plant in North America (see Daily GPI, Nov. 15). Shell CFO Simon Henry said early this year the company was scouting locations but at a cost of “$5 billion to $10 billion a project, we have to be selective” (see Daily GPI, Feb. 3).

According to an economic impact study commissioned by Louisiana Economic Development and Louisiana State University, the Sasol project will produce a total economic impact over the next 20 years of $46.2 billion. Sasol in early 2011 selected a 650-acre site near one of its existing facilities in Westlake as a suitable location for the GTL project. Since September 2011, a feasibility study was undertaken by state officials.

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