Shell keen on local LNG development program

MANILA, Philippines- The Shell Group of Companies is keen on investing in the country’s liquefied natural gas (LNG) development program, a top company official said.

Shell country chairman Edgar Chua said the group had already indicated early this year its plans to participate in the country’s LNG program.

“In January, our CFO had signified our interest to particpate. We are just now looking on how we could participate in the LNG program of the (Philippine) government,” Chua said.

Chua said they have been looking for opportunities to expand Shell’s business exposure in the Philippines.

“We are always looking at possibilities. If we participate, it could be through setting up of an import facility, a LNG pipeline and a power plant,” he said.

But he clarified that they do not intend to construct an LNG power plant that would run on a huge commercial level.

He said if there would be an opportunity to partner with some local parties, they would also look into it.

The Shell group had announced earlier that its board at Royal Dutch Shell plc (Shell) has taken the final investment decision on the Prelude Floating Liquefied Natural Gas (FLNG) Project in Australia (100 percent Shell).

Moored far out to sea, some 200 kilometres from the nearest land in Australia, the FLNG facility will produce gas from offshore fields, and liquefy it onboard by cooling.

The decision means that Shell is now ready to start detailed design and construction of what will be the world’s largest floating offshore facility, in a ship yard in South Korea.

Shell’s FLNG facility will be 488 meters long, and will be the largest floating offshore facility in the world - longer than four soccer fields laid end to end. When fully equipped and with its storage tanks full, it will weigh around 600,000 tons - roughly six times as much as the largest aircraft carrier. Some 260,000 tons of that weight will consist of steel-around five times more than was used to build the Sydney Harbour Bridge.

“Our innovative FLNG technology will allow us to develop offshore gas fields that otherwise would be too costly to develop,” Malcolm Brinded, Shell’s Executive Director, Upstream International, said. “Our decision to go ahead with this project is a true breakthrough for the LNG industry, giving it a significant boost to help meet the world’s growing demand for the cleanest-burning fossil fuel.”

He said, “FLNG technology is an exciting innovation, complementary to onshore LNG, which can help accelerate the development of gas resources”.

The facility has been designed to withstand the severest cyclone - those of Category 5. Ocean-going LNG carriers will offload liquefied gas, chilled to minus162 Celsius and shrunk in volume by 600 times, and other products, directly from the facility out at sea for delivery to markets worldwide. Until now, the liquefaction of offshore gas has always involved piping the gas to a land-based plant.

Shell has progressed the Prelude FLNG project at a rapid pace, with first production of LNG expected some ten years after the gas was discovered.

The FLNG facility will tap around three trillion cubic feet equivalent of resources contained in the Prelude gas field. Shell discovered the Prelude gas field in 2007.