Shell gets to work on possibly making Ascension site of world-class plant

Before Shell announced last month that it is considering building a $12.5 billion gas-to-liquids facility in Ascension Parish, its negotiations with parish officials “got hot and heavy last July” as the chemical manufacturer also considered sites in St. James Parish and Texas, said Ascension Parish President Tommy Martinez.

Now a 2,600-acre site, spread out between La. 70 and River Road and tucked between the DuPont Burnside plant and the Motiva administration building on River Road, is the potential home to 750 full-time jobs with an average annual salary of $100,000, plus benefits, near Sorrento.

“This is the largest announcement that’s ever been made in Ascension, it probably dwarfs Nucor,” Martinez said, referring to the direct-reduced-iron facility under construction in St. James Parish, just south of the Sunshine Bridge.

shell1Martinez said Shell notified parish officials about two years ago that it was a possible contender for a new plant that will use natural gas to create cleaner-burning transportation fuels, such as diesel and jet fuel, and the building blocks for lubricants, plastics and detergents.

The new Shell facility is not a sure thing. The company will spend at least another two years performing preliminary engineering and nailing down permits, said Mike Eades, chief executive officer of the Ascension Economic Development Corp., before it makes a final decision to build here.

“And then it’s five years’ worth of construction,” Eades said.

And that construction is a major task the city of Gonzales and the parish will have to prepare for, Martinez said.

Officials estimate up to 10,000 workers will be on site during the peak of construction.

“We need a little time to get ready for a project of this magnitude,” Martinez said, noting there will have to be plenty of more housing built to handle that many workers.

All total, the state Department of Economic Development said the facility could create about 3,900 indirect jobs for about 4,600 new jobs in the state.

The state Department of Transportation and Development said an estimated $32 million in road improvements will be needed to be made to prepare for the Shell facility.

Shell would help fund certain projects, including turning lanes, as plans are being put in place for widening La. 70 to four lanes from La. 22 to the Sunshine Bridge, and widening La. 22 to four lanes from Interstate 10 to La. 70. The work could be completed by the fall of 2016.

The estimated $12.5 billion construction figure for the GTL facility is conservative, according to the state.

Eades said he understands the Shell facility would rival the company’s nearly $20 billion Pearl GTL facility in Qatar and process approximately 140,000 barrels of gas per day.

LSU estimates the project would produce a total economic impact of $77.6 billion over the construction period and first 15 years of operation.

The state offered Shell a competitive incentive package that includes a performance-based grant of $112 million to reimburse costs associated with road improvements, land acquisition and other infrastructure costs. Shell also would receive the services of the state’s workforce training program and qualify for Louisiana’s new Competitive Projects Payroll Incentive — a 12 percent payroll rebate for each GTL job — as well as the Industrial Tax Exemption Program.

“Here in the heart of Louisiana’s world-scale petrochemical industries, the Gulf Coast GTL project would give thousands more of our people an opportunity for a rewarding career right here at home,” said Gov. Bobby Jindal. “We know that the final investment decision is yet to come, but we also know that Shell’s selection of Louisiana proves once again that there’s no better place in the world for major business investment.”

shell2Shell said it will begin the permitting process immediately.

“Should we move forward with the project, we expect project costs to be well in excess of the minimum spend that was agreed upon with the State of Louisiana,” said Executive Vice President Jorge Santos Silva, who directs Integrated Gas activities for Shell Upstream Americas.

Dan Borne, president of the Louisiana Chemical Association, said it’s too early to know how Shell’s business would fit with the other plants in the region.

“It might, for example, require materials from other plants in the area to use in its processes and it might produce products that other plants in the region use for their production,” Borne said. “This is one of the strengths of Louisiana’s petrochemical industry. There is a lot of synergism between and among different plants in the parish, in the area and in the state.”