Liquefied natural gas
Liquefied natural gas (LNG) is helping to bring the benefits of cleaner-burning natural gas to markets all over the world. Shell is one of the world’s leading suppliers of LNG.
The LNG process enables natural gas to be easily transported from areas where it is abundant to places where it is needed. To create LNG, natural gas is cooled to -162ºC, turning it into liquid form and shrinking its volume by 600 times. At its destination, the LNG is converted back into gas for conventional use.
Shell was a pioneer of the LNG industry more than 50 years ago and is one of the world’s largest LNG suppliers. Today, new global LNG supply is mainly coming from Australia, North America and East Africa. At the same time, we expect LNG demand to rise by 5% each year over the next two decades. Shell is currently involved in several LNG projects around the world.
For example, the LNG plant at Sakhalin-2 (Shell interest 27.5%), located off the east coast of Russia, provides around 9% of Japan’s and 8% of South Korea’s LNG supplies. LNG Canada (Shell interest 50%), is a proposed joint venture to develop an LNG export project in British Columbia, connecting the gas supply from north-west Canada to markets in Asia.
Floating liquefied natural gas (FLNG) facilities enable LNG to be produced, liquefied, stored and offloaded at sea. This makes it possible to reach offshore gas fields previously considered too expensive or too difficult to develop. FLNG is designed to reduce the local environmental footprint of LNG infrastructure and decrease the disturbance to land and marine life.
We are constructing our first FLNG facility, Prelude FLNG (Shell interest 67.5%), which will be located 475 km off the coast of Western Australia. It is under construction in various locations around the world – the main construction site is the Samsung Heavy Industries Yard in Geoje, South Korea. Once completed, Prelude FLNG will be the largest floating offshore facility in the world.
LNG for transport
Cleaner vehicles and fuels are needed to meet increasing demand for transport with less greenhouse gas emissions. Cleaner-burning LNG is a fuel for heavy-duty road transport, shipping and industry that is virtually free of sulphur emissions and has lower levels of nitrogen dioxide and particulates. It can be used as an alternative transport fuel to diesel and heavy fuel oil.
In shipping, LNG is already used as a fuel for vessels on inland and coastal waterways. In Norway, Gasnor, a Shell company, is a leading supplier of LNG to industrial and marine operators. Since 2015, Shell is able to import and use storage capacity at the Gas Access to Europe (Gate) LNG terminal in the Netherlands, which enables us to supply LNG to marine and road transport customers in north-west Europe. Shell is also using the terminal to supply LNG fuel to its growing truck-refuelling network in the Netherlands. In the same year, Shell also signed an agreement with Plouvier Transport NV and Intertrans Tankschiffahrt in Europe to charter 15 new inland dual-fuel barges. They will run predominantly on LNG and are expected to use the new Gate terminal.
Since 2015, Shell has been operating two offshore supply vessels for our deep-water activities in the Gulf of Mexico. The vessels run mainly on LNG, with one more LNG-fuelled vessel on order. We have also started construction of an LNG refuelling vessel to supply LNG-powered vessels and ships across north-west Europe.
In the USA, Shell continues to work with the truck-stop chain, Travel Centers of America, to develop a network of LNG refuelling stations for trucks. The first station was opened in California in 2014 and five more LNG stations are now operational in California, Texas and Louisiana. Shell also has two LNG refuelling stations in Canada.