Saudi Aramco is to invest $30m in a US-based company that is developing a small plant to demonstrate technology that can turn natural gas into gasoline.

The San Francisco-based Siluria Technologies is developing a new cracker that it says can create chemicals such as ethylene as well as gasoline at a far more economical rate than conventional gas-to-chemicals and gas-to-liquids technologies currently in operation.

The demonstration plant is being built at La Porte in Texas and the technology will use catalysts to synthesise methane into more complex molecules. Siluria claims it can make a gallon (3.8 litres) of gasoline from natural gas for around $1 and expects to have two commercial-sized plants in operation by 2017.