Some startup companies have now found a way to convert natural to a type of Gasoline which would cost about $1 at the pumps.
To do so would require a refinery in our market. With the Haynesville Shale being rich in natural gas it also makes sense for a refinery to be close to the source.
This sounds very promising for the future. What is everyone's sentiments about this. How realistic is this to happen in the next few years?
Please see articles below.
Gas to Liquids (GTL) requires high crude prices to be profitable. Several plants that were on the drawing board have been cancelled or delayed due to the current price environment. GTL plants will buy the cheapest gas they can get which means that Haynesville gas will have to compete with Marcellus gas. That will limit the amount of Haynesville gas going to any end user and will keep the price low. Marcellus operators can incur transportation costs and still make a profit at $2/mcf. GTL and all other plants using natural gas as a feed stock will be located on the Gulf Coast.
From an industry report on natural gas pricing in the Marcellus.
The Dominion South Point strip price for the balance of 2015 (March-December) has been settling consistently under $1.90/MMBtu, while Transco Zone 6 in New York is averaging around $2.80/MMBtu in this week's forwards market. Meanwhile, Northeast and US gas production remain near record levels. The breakeven price environment and looming oversupply leaves producers and the industry vulnerable to the downside.
Any use of NG other than current applications like heating homes is close to a decade away. It usually takes companies 3-5 years to plan/permit/finance a large project and then at least 3-5 years to built the project. Even building a simple NG power plant can take at least 3 years after the announcement.
Looks like the Saudis have already bought it out. I don't think they have any intentions on expansion or further development of natural gas.
I'd read that LNG works for diesel, but not gasoline??
2/7/2015 - A Houston-based company announced plans Tuesday to invest $2 billion for a liquefaction facility and liquefied natural gas export terminal near Lake Charles.
They are not, going to make diesel or gasoline at this plant.