MercoPress. South Atlantic News Agency

Shell plans to invest heavily in Tierra del Fuego

Royal Dutch Shell has selected Tierra del Fuego as its main option to set up a plant to extract liquid fuels from natural gas. The project involves investing 1,5 billion US dollars and will concentrate in elaborating virgin petrol, jet fuel and diesel-oil.

According to Shell's CEO in Argentina, David Beer "the advantage of liquid fuels extracted from natural gas is environmental: absence of sulfur and aromatics which makes them particularly tempting for world markets".

The drawback is the intense temperature of the refining technology, however this excess heat can be channeled into a daily energy production plant of 100MW, equivalent to Tierra del Fuego's total electricity consumption.

"The markets-distance disadvantage is overly compensated by the low medium temperatures of the region, because in the other options considered, (Australia, Malaysia, Iran, Egypt) heat would be excessively costly to dissipate", said Mr. Beer.

Royal Dutch Shell is currently having talks with French Total Austral, the main natural gas producing consortium in Tierra del Fuego, since the project will demand 18 billion cubic meters daily, during 20/25 years, equivalent to 20% of Argentina's total production. However the area is believed to have the potential for rapidly doubling production.

For the last ten years Shell has been working with a natural gas liquid fuels extracting pilot plant in Malaysia and apparently costs are similar to those in traditional crude oil refineries. The technology was first developed by the Germans during World War II

However Mr. Beer said that the final decision over the feasibility of the project will be made at the end of the year. Cautious local officials in Tierra del Fuego added that "the official announcements will be made once investments have been confirmed".