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Flexibility and diversity keep Shell LNG up to the challenge

Lloyds List: Flexibility and diversity keep Shell LNG up to the challenge

“Shell is a partner in, and advisor to, six export plants which account for almost 40% of world LNG production. The group is playing a similar role in several new export projects under development, not least Sakhalin in Russia, and with a number of existing liquefaction plants being expanded, notably those in Oman, Nigeria and Australia.”

Oct 21, 2004

The Shell LNG shipping pedigree is one of the most diversified and durable among oil and gas companies worldwide.

Methane Princess , the first LNG carrier to deliver a commercial cargo, some 40 years ago, was managed and operated by Shell. Today, the company holds an equity stake in 28 LNGCs in service and six on order, while a further 34 LNGCs are on charter, either directly or through Shell joint ventures.

The specialist shipping services provided by Shell International Trading and Shipping Co (Stasco) to Shell Gas and Power are an essential element in the many LNG supply chains the group maintains worldwide.

Shell is a partner in, and advisor to, six export plants which account for almost 40% of world LNG production. The group is playing a similar role in several new export projects under development, not least Sakhalin in Russia, and with a number of existing liquefaction plants being expanded, notably those in Oman, Nigeria and Australia.

At the other end of the supply chain the energy major is developing new markets through the provision of additional regasification terminals or the purchase of capacity at existing facilities. Access to shipping capacity is critical to developing new markets and optimising the full LNG supply chains.

‘Stasco’s long experience, in-house simulation tools and diversified fleet enable the optimisation of shipping requirements for each particular project,’ says Gary Smith, general manager of LNG shipping at Stasco.

‘This has become increasingly important when planning for multiple destinations, a pattern which is becoming more common as the global network of export and import terminals increases, along with the volume of LNG moving under short-term contracts.’

A case in point is the pool of six ships Shell is currently operating among its various projects, as appropriate. The ships provide the company with considerable flexibility to cater for everything from spot cargoes and short-term contract volumes to the availability of new production due to liquefaction plant ramp-up, expansion or debottlenecking. The pool is comprised of four Shell ships delivered from Mitsubishi and Daewoo over the last two years Galea, Gallina, Granatina and Gemmata one of the older ships in the fleet, Galeomma , and the chartered-in vessel Muscat LNG .

Among the newbuilding vessels with which Stasco is involved are the 141,000 cu m Moss spherical tank ships building at Hyundai which the company will operate on behalf of Bonny Gas Transport and Nigerian LNG (NLNG).

The ships will be delivered, at intervals, beginning next month and stretching until March 2006. They will transport gas from NLNG’s new fourth and fifth trains at the Bonny export terminal.

The additional Nigerian LNG will be sold to customers in the Atlantic Basin and Shell has been strengthening its position in the region. The company has secured one-third of the capacity at Cove Point and 100% of the expansion project at Elba Island near Savannah, another US East Coast LNG import terminal.

In Mexico the planned Shell import terminal at Altamira on the Gulf Coast has gained approval, while the company’s gravity-based Gulf Landing offshore terminal proposed for positioning off the coast of Louisiana is currently being reviewed by the various relevant planning authorities.

Shell is also one of the sponsors in constructive discussions on progressing the Mariscal Sucre LNG project, a mooted scheme to export Venezuelan LNG.

‘Probably the stiffest challenges our industry is currently facing, at this time of rapid expansion, are maintaining standards, dealing with emerging technologies and managing commercial risk,’ believes Mr Smith.

‘We at Stasco are well-placed to meet these challenges.

‘In addition to our wealth of past experience, we have naval architects, commercial people and ship operations experts working alongside each other here in our London headquarters to provide solutions which continue to set industry standards.’

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