Integrated energy giant,
Royal Dutch Shell plc
), has selected Ascension Parish on the Mississippi River in
Louisiana as the location to build a gas-to-liquid (GTL)
facility. The construction would cost the company at least $12.5
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The multibillion-dollar plant will produce liquid fuels (like
gasoline and diesel) from natural gas with the aim of reducing
emissions from the level emitted in liquids produced from oils.
Such a facility would also support the company's efforts of
increasing the use of natural gas.
The Louisiana government believes that if Shell builds the
project in Ascension Parish, it could avail the opportunity of
expanding its manufacturing operations onshore.
Shell has been offered a reimbursement of $112 million by the
government for its contribution to infrastructural and other
project-related development, if any. The company would also be
eligible for the Industrial Tax Exemption Program and the
Competitive Projects Payroll Incentive Program.
Shell plans to build small scale facilities that would liquefy
natural gas, producing fuel for vehicles. It also plans to supply
liquefied natural gas to 100 refueling stations spread across the
country. Apart from creating a large number of jobs, the project
is expected to positively impact the economy over the course of
its construction as well as in its first 15 years of operation.
Shell's first commercial GTL plant was established in Malaysia in
1993. Since then the company has continued to use natural gas as
a replacement for oil to produce liquids, thus, reducing the
dependence on imported oil.
Royal Dutch Shell currently retains a Zacks Rank #4 (Sell),
implying that it is expected to underperform the broader U.S.
equity market over the next 1 to 3 months.
Meanwhile, one can consider other stocks in the energy sector
Magellan Midstream Partners LP
Seacor Holdings Inc.
) as attractive investment opportunities. All these currently
hold a Zacks Rank #1 (Strong Buy).