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Only a fraction of big gas export projects will be built – Shell

Screen Shot 2013-11-16 at 09.16.49Extracts from a Reuters article published Monday 9 June 2014

LONDON, June 9 (Reuters) – Only a fraction of the natural gas export projects being developed around the globe will become reality as high costs and weakening gas prices torpedo those that until recently promised huge returns on investment. 

But high development costs and low profit margins in the gas sector mean most of the projects will fail, Royal Dutch Shell’s director of projects and technology told Reuters in an interview.

“There is always so much talk about these big LNG projects around the world, but only a small fraction of them will get built,” said Matthias Bichsel, who is also a member of Shell’s Executive Committee.

In the east Mediterranean, where Israel and Cyprus have discovered large offshore gas fields, Australia’s Woodside Petroleum last month pulled out of an agreement to take a stake worth up to $2.7 billion in Israel’s flagship Leviathan gas project.

Shell is building the world’s first floating liquefied natural gas (FLNG) project in Australia, named Prelude, which will be the biggest maritime vessel ever constructed.

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