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Malaysia Star: Shell eyeing LNG project in Arctic Circle

Saturday June 2, 2007

BINTULU: Oil major Shell is venturing into territory others fear to tread in its search for fresh ground to tap liquefied natural gas (LNG). It is setting up an LNG plant in the Arctic Circle.

Shell Asia Pacific Gas and Power executive vice-president Datuk Jon Chadwick said the company was looking at setting up an LNG facility in ultra-cold conditions that required very extreme engineering and technological feats.

“We are also looking at setting up floating LNG plants in the middle of oceans.

“Shell is reaching out more extensively globally and we are second to none in this natural gas business.

“We are going to establish a worldwide web of LNG plants because the need for gas and related products is expanding very rapidly,” he told the media during a visit to the Shell Middle Distillate Synthesis plant here on Tuesday.

Chadwick, who would not disclose the amount to be spent on such projects, said Shell’s LNG plants in Malaysia, Brunei and Australia were “highly productive” and constituted a huge amount of the global export market.

The Malaysia LNG 2 and LNG 3 projects export 16 million tonnes year; Brunei LNG exports 7.2 million tonnes while Australia’s northwest shelf exports 16 million tonnes.

“Shell supplies 65% of South Korea’s LNG needs and 35% of Japan’s needs. We were the first to supply LNG to China and Mexico and are expanding into new markets everywhere all the time,” Chadwick said.

He said the main challenge facing the company was the shortage of LNG against a scenario of rising demand, which necessitated the search for new sources.

”From the time we start exploration to the time we make the first shipment, it takes up to eight years.

“That is why we must make a headstart. Considering the fact that prices of steel and other construction materials are going up all the time and energy prices are also soaring, we must make new discoveries and set up new plants as soon as possible,” he added.

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