Senior Shell executive reported Wednesday that Royal Dutch Shell is studying the use of floating liquefied natural gas (LNG) terminals to ship gas produced in Iraq and Egypt
The terminals would each have capacity to export two million tonnes per year (tpy) of LNG, John Mills, Shell executive vice president for gas and power in North Africa, the Middle East and South Asia, told reporters at an energy conference.
Shell signed an initial multi-billion dollar agreement last month with Iraq to capture gas that otherwise would be burnt off during production of oil. The gas will supply power plants and some would be exported as LNG through Basra, also Iraq’s main oil export terminal. The terminal would be Iraq’s first LNG export facility.
Shell is also considering the use of a floating LNG terminal for gas produced from a gas field off Western Australia, Mills said.
That terminal could be larger, with capacity of up to 5 million tpy, he said.
Shell’s giant Pearl gas-to-liquids plant in Qatar was on course for completion by the end of 2010, Mills said.
"It will be completed by the end of the decade," he said.
The super-clean fuel plant is Shell’s largest foreign investment and will be the world’s largest such plant. Spiralling costs have taken the price to as much as $18 billion from an original budget estimate of $5 billion.
A floating storage plant being built for LNG imports into the United Arab Emirates was also on track for completion by the end of 2010, Mills said.
Shell will partner Qatargas to import LNG during peak summer demand periods to the UAE’s Dubai, supplying up to 1.5 million tonnes per year.
Dubai, one of seven emirates in the UAE, is struggling to meet rapid demand growth as it harnesses the region’s windfall from record oil prices to develop tourism and trade.
LNG is natural gas cooled to liquid form for export on specially designed tankers. The liquid is then delivered to receiving terminals where it is regasified and pumped into onshore pipelines.