Shell to invest $20bn in GTL, LNG gas business by 2015 – CEO

14 November 2012 16:22 Source:ICIS News

LONDON (ICIS)--Shell aims to invest more than $20bn (€16bn) between 2012 and 2015 in its gas-to-liquids (GTL), liquefied natural gas (LNG) and related gas businesses, the CEO of the international energy and chemicals major said on Wednesday.

The investment comes as Shell trebled earnings from that business in the past five years, Peter Voser said in an investor presentation.

“Strong growth in gas markets, especially Integrated Gas, is a major opportunity for Shell and our shareholders,” Voser said.

“Our Integrated Gas earnings have more than trebled in the last five years, reaching $9bn over the last year, driven by LNG and GTL, and we see growth opportunities to invest over $20bn here for 2012-15,” he said.

Shell expects global natural gas demand to increase by 60% from 2010 to 2030, reaching 25% of the global primary energy mix, and within that, strong growth in LNG.

LNG demand has doubled to 200m tonnes/year in the first decade of this century. Shell expects LNG demand to double again to 400m tonnes/year by 2020, and potentially reach 500m tonnes/year by 2025, Voser said.

Meeting this demand growth will require substantial industry investment – potentially more than $700bn – and continued innovation and interdependency between supplier and customer countries, he said.

Shell, which sees itself as “the industry leader” in LNG and in GTL, is developing innovative new integrated applications, such as gas-to-chemicals, converting ethane into commercial petrochemicals, and LNG for transport, Voser said.

Shell has 22m tonnes/year of LNG capacity on stream, and it is building 7m tonnes/year of new LNG capacity in Australia that will increase its production by 30%.

Furthermore, the company is seeking additional LNG opportunities in Australia, Indonesia and North America, Voser said.

For the longer term, Shell has gas-focused exploration programmes in China, South Africa and Ukraine - three countries with large-scale resources potential, he added.

($1 = €0.79)

By Stefan Baumgarten