Here is update on Shell’s $12.5B GTL Plant for Sorrento, La.
Part of driving force is economics for refiners to recover the by-product LPG products from fuel gas blending streams. And the current (Jan 2012-Aug 2013) slightly higher cost ($30/Bbl Frac Spread) for other NG processors to recovery the LPG from NG. Historically the Frac Spreads have been near zero at lows of 2006 & 2009 and hi’s $40-50/bbl in 2008 & 2011.
Below are links to recent articles on both :
Market conditions encourage refiners to recover by-product gases
Oct 7, 2013 OGJ – Article Link @ http://www.ogj.com/oil-processing/gas-processing.html
Segregating fuel-gas blending streams and extracting hydrogen, NGLs, ethylene, and propylene provide a moderate capital cost route for a refinery to improve profitability.
Why Frac Spreads are Up Slightly helping NG Processors
Oct 11, 2013 Market Realist – Article Link @ http://finance.yahoo.com/news/why-frac-spreads-slightly-helping-163459616.html
Some market participants view fractionation spreads (frac spreads) as one indication of profitability of some NG processing companies. Frac Spreads depend on NGL and NG prices, and they increase when NGL prices increase relative to NG prices. <See article for current and historical charts>