S Africa's Sasol to build first US gas-to-diesel plant

In an ambitious venture betting on the prospects of the glut of cheap natural gas in the US continuing for many years, South African energy company Sasol yesterday announced plans for building America's first commercial plant for conversion of natural gas to diesel and other liquid fuels.

Sasol, the Johannesburg-based company, is a pioneer in a technology that energy scientists have been looking to develop for decades because of its potential to produce liquid fuels without the use of oil, which has historically cost far more than natural gas.

With smaller plants in South Africa and Qatar already operational, Sasol has designed its new Louisiana plant to produce 96,000 barrels of fuel a day using its ''gas to liquids,'' or GTL, technology.

This will be the second-largest plant of its kind in the world after Royal Dutch Shell's Pearl plant in Qatar, and would cost $11 billion to $14 billion to build.

The company said yesterday that it would begin initial engineering work on a long-discussed complex in Westlake, Louisiana, that will use domestic natural gas, which was among the cheapest in the world, to make higher-value chemicals and fuels.

Sasol's CEO David Constable said in an interview that the company could monetise these gas resources in North America.