Sasol plans natural gas to diesel project

Sasol Ltd. (Sasol) has set its sights on building a plant, at a cost of up to USD 10 billion, that would convert natural gas into diesel. Last week, the company’s board approved an 18 month feasibility study for the project, which would be constructed on land adjacent to Sasol’s existing chemical facility in Louisiana. If given final approval, the plant would be the first in the U.S. to use “gas-to-liquids” technology. The U.S. is an attractive location for such a project as the natural-gas prices are quite low. Sasol’s proposal is one of several solutions to address what to do with the surplus of supply caused by the increase in drilling at shale-rock formations. The company’s project is one of the most ambitious, as it would basically put natural gas on par with crude oil as a key material for transportation fuels. Diesel prices affect the cost of goods everywhere because the fuel is mostly used in trucking. For this year, retail diesel prices in the U.S. are up 16%. Based in Johannesburg, Sasol is the world’s biggest producer of motor fuels from coal.

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