NEW YORK, Dec 5 (Reuters) - Royal Dutch Shell saidon Thursday it has canceled a proposed gas-to-liquids (GTL)plant in Louisiana as costs rose and the company reins inspending.
The project, which would have converted natural gas togasoline and other refined products, was expected to cost morethan $20 billion, a Shell spokeswoman said, far higher than the$12.5 billion price tag estimated in September.
Shell said that it was not certain that natural gas priceswould remain sufficiently low to make such a project, which hasproved a success in other parts of the world, viable in NorthAmerica.
"Despite the ample supplies of natural gas in the area, thecompany has taken the decision that GTL is not a viable optionfor Shell in North America at this time," Shell said in astatement.
A glut of natural gas supplies in North America has widenedthe gap between oil and gas prices, prompting the first seriouslook at GTL technology in the United States.
South African energy firm Sasol is building a 96,000barrel-per-day GTL plant in Westlake, Louisiana, which isexpected to cost $11 billion-$14 billion.
But the price tag proved too high for Shell, which isslowing spending under its incoming chief executive Ben vanBeurden. Shell recently canceled the $10 billion Arrow LNGproject in Australia, potentially in favor of another project.
