Our expertise in the LNG industry is based on the more than 45 years of technical advice that we have provided for gas liquefaction plants around the world – including the world’s first commercial plant, which came on-stream in 1964 in Algeria. LNG is fast becoming a truly global commodity and will continue its rapid expansion in the years ahead, with global demand potentially doubling in the next decade. This will be driven by the growing gas import needs of China, India, the Middle East and Europe – but also by new importers such as Malaysia, the Philippines, Singapore, Thailand and Vietnam.
At Shell, we are proud of our leadership in this sector of the industry. In recent years, ventures in which Shell participated have supplied as much as 30% of global LNG. We have around 21 mtpa of Shell-share liquefaction capacity currently in operation in Australia, Brunei, Malaysia, Nigeria, Oman, Qatar and Russia. Qatargas 4, a joint venture between Qatar Petroleum (70%) and Shell (30%), was brought on-stream in early 2011 with a single mega train delivering approximately 7.8 mtpa of LNG and a peak production of 280 thousand boe/d. The project opened up new markets for Qatari LNG in China
and Dubai, with agreements signed in 2008.
[A] Projects in operation or under construction.
Our total LNG sales volume in 2011 was 18.8 million tonnes – up 12% from 2010. This increase mainly reflected the increase in sales volumes from Qatargas 4. Sales volumes were also higher from Nigeria LNG, helped by a stable gas supply, and from the Sakhalin-2 project, where production reached 10 mtpa. These increases were partly offset by the reduction in the Shell share of LNG production from Woodside Petroleum Ltd – the result of Shell’s sale of part of its shareholding in the company in November 2010.
During 2011, total LNG sales contracts were signed for some 6 mtpa. These long-term contracts of up to 25 years are linked to oil prices and will be fulfilled by Shell’s global LNG portfolio. At an oil price of $110 per barrel the contracts would deliver revenues of around $100 billion on an undiscounted basis.
Three LNG projects are currently under construction in Australia, totalling around 7 mtpa: Prelude FLNG (Shell interest 67.5%), Gorgon Trains 1-3 (25%) and Wheatstone (6.4%). We are also assessing an additional 15 mtpa in future options with projects involving Arrow Energy, Gorgon Train 4 and the Browse and Greater Sunrise fields offshore Australia as well as the Abadi field of Indonesia.
GLOBAL LNG PORTFOLIO [A]
[A] As of March 2012.