South African energy and chemicals group Sasol told US Congressional subcommittees this week that its proposed 96 000 bl/d gas to liquids (GTL) facility, earmarked for development in Louisiana, will be a ‘game changer’ for the US energy sector and will represent one of the largest ever foreign direct manufacturing investments in the US.

The JSE-listed group is considering GTL projects and a world-scale ethane cracker with a combined investment value of between $16-billion and $21-billion over the coming several years.

Addressing a joint hearing of the House of Representatives subcommittees on energy and power and commerce, manufacturing and trade, senior group executive for global chemicals and North American operations André de Ruyter testified that the solution would add transport fuels and chemical products to the spin-offs arising from the country’s now abundant gas resources.

The country’s gas production and reserves have increased markedly with the widespread adoption of hydraulic-fracturing technology, which has made it possible to exploit shale gas resources. Hitherto, the gas has been deployed primarily in the power generation market and there is a move to develop infrastructure for the export of liquefied natural gas (LNG).

The subcommittees convened the hearing to discuss the role the energy boom is having on the country’s manufacturing sector, with concerns being expressed by some industrialists that a too rapid approval of LNG export terminals could undermine the manufacturing revival, which was being underpinned by the availability of well-priced natural gas.

Sasol, which produces fuels and chemicals from coal and gas using its proprietary Fischer–Tropsch technology, announced in December that it would proceed with front-end engineering and design (FEED) for an $11-billion to $14-billion GTL investment at its existing Lake Charles chemical complex, located near Westlake, in Louisiana. The facility, comprising two 48 000 bl/d GTL plants, could be commissioned by around 2020 or 2021.

It is also moving ahead with a FEED study for a 1.5-million-ton-a-year ethane cracker, which would involve investment of between $5-billion and $7-billion. An investment decision is expected during 2014.

The projects, which would be the single largest manufacturing investment in Louisiana’s history, represent around two-thirds of Sasol’s current market capitalisation.

De Ruyter argued that the GTL solution fundamentally altered the chemistry of the gas to yield “maximum in-country” value addition in the form of liquid fuels and chemicals. About 70% of the plant’s production will be ultra low-sulphur diesel, with naphtha and liquid petroleum gas as coproducts. The remaining 30% of production will be chemical products.

“This contrasts with the technology for LNG, which essentially repackages natural gas for export to other countries,” De Ruyter told the subcommittee members.

The GTL diesel produce would also be fungible with conventional diesel and could, therefore, be “used neat, or as a blend stock in existing diesel vehicles and in existing fuel delivery infrastructure without modifications”.

“We encourage Congress to continue to promote policies that enable industry to unlock the potential of America’s clean, abundant natural gas resources, enhance domestic manufacturing and foster economic growth,” he concluded.