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Natural Gas Continues to Provide New Opportunities

DNR Secretary Angelle joins Gov. Bobby Jindal in welcoming announcement of potential multi-billion-dollar gas-to-liquids facility in Calcasieu Parish

Tuesday, September 13, 2011—Louisiana Department of Natural Resources (DNR) Secretary Scott Angelle today echoed Gov. Bobby Jindal's welcoming of the announcement of a proposed $8 billion-to-$10 billion investment in construction of a natural-gas-to-liquids plant in Calcasieu Parish by the South African company Sasol.

The company has announced the beginning of a feasibility study for the proposed plant, which would convert natural gas to diesel fuel and other products, with the potential for construction to begin by 2013.

"This announcement reinforces the efforts by Gov. Jindal and DNR to seek ways to promote responsible development of our natural gas resources, such as northwest Louisiana's Haynesville Shale," Angelle said. "The Haynesville Shale, named earlier this year as the top-producing shale natural gas play in the nation, has been a key component of the transformation of this country's ability to produce and supply natural gas for energy and for manufacturing feedstock."

Angelle noted that while the price ratio of oil per barrel and domestically produced natural gas per thousand cubic feet (mcf) had traditionally been approximately 7-to-1, the recent upsurge in availability of domestic natural gas has driven that price split to more than 22-to-1 - with oil trading at around $88 a barrel and natural gas trading at around $4 per mcf.

The relatively new abundance of domestic natural gas and its subsequent greater affordability have helped give Louisiana and the U.S. a competitive edge in attracting projects such as Sasol's proposed gas-to-liquids facility, as well as expansions and new construction in the petrochemical manufacturing industry, Angelle said.Companies such as Dow Chemical have announced plans to reopen, expand or begin new construction on plants along the Gulf Coast and elsewhere in the U.S., crediting the supply provided by domestic natural gas shales for creating the opportunity.

The American Chemistry Council has estimated that domestic chemical investments made on the basis of shale gas supplies could be worth more than $16 billion, and create 17,000 direct U.S. jobs, along with a further 400,000 indirect jobs.

"Whether it is used as fuel or feedstock, we must recognize that now is the time for America to take advantage of the economic and environmental benefits of natural gas," Angelle said.