Shell has learned from its Pearl GTL project and costs can be cut: Voser

In remarks at a press briefing and in a public question-and-answer session at the CERAWeek conference in Houston, Voser said Shell is “very pleased” with the multi-billion-dollar plant, whose two trains of 70,000 b/d each are five times the size of the small-scale train the company operated in Malaysia for many years. A second plant at Qatar is in the final stages of construction.

Asked by CERA head Daniel Yergin about the prospect of building a GTL plant in the US — which like Qatar has abundant and relatively cheap natural gas — Voser said that in the US “clearly you have the gas and the downstream markets, but we are still a few years away” from a decision.

Between his question and answer session with Yergin, Voser touched on several issues:

–A decision on whether to build an ethylene cracker in the Marcellus region, likely on the Ohio River, is still a few years off. But a decision on whether to site a plant in Ohio, West Virginia or Pennsylvania — the latter considered less likely — will be made in the short to medium term. (Earlier today, Ohio Governor John Kasich likened Shell to the CIA in terms of not sharing any secrets regarding its siting plans.)

–Although Shell has not announced a formal decision to proceed this summer with drilling in the Chucki and Beaufort seas off the coast of Alaska, Voser said “we are building up for drilling in July, August and September.” He also noted that the drilling would take place in shallow waters, so comparison of the risks with the disaster at the Macondo well in the Gulf of Mexico were not accurate. “This isn’t deepwater, and it’s not under high pressure,” he said.

–In his luncheon address to the CERAWeek meeting, Voser became the latest speaker at the meeting to call for full disclosure of the contents of fracking fluid. “We support President [Barack] Obama’s call for regulation to disclose chemicals used in hydraluic fracturing fluids,” he said. “Indeed, we support regulations to promote transparency and pubic engagement by the tight and shale gas industry in relation to all of its activities.”

–In the planning of North American gas projects, Voser said Shell uses an estimated range of $4 to $6/Mcf, Henry Hub basis, as a price. “Reaching the low end of that in a few years is a good guess,” he said. But operating cash costs for its North American properties is less than $2/Mcf, Voser said.