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Bloomberg: Shell’s New Discovery in Brunei May Help Sustain LNG Output

By Dinakar Sethuraman

Nov. 14 (Bloomberg) — Royal Dutch Shell Plc said it discovered gas in Brunei’s waters, enabling the sultanate to sustain production of liquefied natural gas.

Brunei Shell Petroleum Sdn Bhd., a venture between Brunei’s government and Shell, found gas in the Bubut area, located about 15 kilometers (9 miles) from a LNG plant that exports clean fuel to utilities in Japan and South Korea, the company said in a statement on Nov. 9 on its Web site. The company declined to give details on reserves and output from the new field.

“This latest gas discovery is important to fulfilling the LNG contract,” said Grahaeme Henderson, managing director, Brunei Shell Petroleum. “The discovery is in shallow waters and close to existing infrastructure and we are confident of bringing production on stream in the shorter term.”

Brunei’s 11.83 trillion cubic feet of gas reserves may run out in the next 27 years, according to the BP Statistical Review of World Energy 2007. The country must find more gas to renew gas sales to utilities including Tokyo Electric Power Co. under contracts that expire in 2013.

Tucked between Indonesia and Malaysia, Brunei is the 10th- largest LNG producer in the world, according to the BP report, down from fourth place in 2000.

“We have no plans to expand Brunei,” Jon Chadwick, executive vice president, Shell Gas & Power, Asia, said yesterday in Singapore. He declined to give reasons.

The Butuk discovery, which isn’t adequate to support a new LNG production line, may supplement gas production from Ampa and Champion areas, which feed a 7.5 million-metric-tons-a-year LNG plant. Brunei produced a record 7.2 million tons of LNG last year, according to the BP report.

To contact the reporter on this story: Dinakar Sethuraman in Singapore at [email protected] ;

Last Updated: November 13, 2007 23:22 EST

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