The Wall Street Journal calls the move "one of the most expensive gambles on clean fuel in the history of the energy industry."
Named "Pearl GTL," the project is, in part, a way for the company to flex its corporate muscles and show its rivals that it can handle massive, complicated projects -- and potentially make a ton of money from them.
The reason? Oversupply of natural gas has pushed its price down considerably. If Shell can develop a sustainable way to turn gas into oil products, that will be much more attractive than crude, currently selling at more than $80 a barrel.
The plant is set to begin production next year, and is the latest step in major oil companies' attempts to make lemonade out of lemons. Blocked from easily accessible crude in the Middle East, companies are looking for alternative oil locations (Alberta, Canada and North Dakota) and new technologies, such as algae-derived biofuels.
A major hurdle is that GTL requires massive amounts of energy to make the conversion -- two steps forward, one step back, if you will.
Worse, critics say the technology isn't really a good solution in most locations.