NAT GAS PRICE VOLATILITY CHANGES SHELL’S PLANS

Shell Axed GTL Plant, Citing Oil And Gas Price Uncertainty

Zotlan Ban, December 9, 2013 (Seeking Alpha)

“…Shell cited uncertainty about the future of oil and gas prices as the reason to abandon the [gas to liquids (GTL) plant in Louisiana]… The EIA thinks that for such projects to be viable, the price of natural gas needs to be below $6 per million BTUs. In the absence of being able to secure long-term natural gas supplies under this price threshold, the price of oil would have to rise significantly… The Shell decision cannot be based on the belief that oil prices are headed much lower either, because it is a well-known fact that projects ranging from deep water, shale oil, oil sands, and scavenging old conventional fields in order to squeeze out some more oil are all dependent on oil prices staying at current levels…The most likely reason left for it to abandon the plan, which up to recently was obviously thought to have much potential given that Shell even picked a site and secured subsidies and concessions totaling over $120 million from local authorities, can only be because it now sees US natural gas prices going up significantly…” click here for more

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