Shell eyes LNG expansion

Shell aims to expand its LNG portfolio in the coming years, with plans to create additional demand in new markets, as part of its energy transition strategy.

The firm aims to create 3mn t/yr of additional demand from new markets by 2025, the firm said in its energy transition strategy presentation. New target markets include the Philippines, Indonesia, Brazil, Pakistan and the Bahamas.

Shell is also looking to expand its LNG portfolio with additional offtake agreements, including its 2mn t/yr deal with Mozambique LNG and a similar contract with US firm Venture Global, the developer of the 10mn t/yr Calcasieu Pass export facility. Additional agreements will add to Shell's production capacity, which is expected to increase by 7mn t/yr by 2025 once the Canada LNG facility and the seventh liquefaction train at Nigeria's Bonny liquefaction complex are on line.

The firm plans to invest only in competitive LNG assets with a technical cost of less than $5/mn Btu, the firm said. This would be in line with its average existing cost, which has fallen by approximately 40pc to $4.80/mn Btu from about $8/mn Btu in 2015.

Shell expects global LNG trade to continue to expand in the coming years and reach roughly 670mn t/yr by 2040. Global LNG deliveries totalled 365mn t in 2020, according to Vortexa.

Shell delivered 70mn t of LNG last year, it said, with its fleet of LNG carriers standing at 60 vessels.

By Antonio Peciccia