Shell studying US Gulf gas-to-liquids project
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Oilgram News (28-Oct-11)
Also considering investment in unconventional US oil field
London-Shell is studying the economics of a possible gas-to-liquids export project on the US Gulf Coast and is looking at opportunities to invest in an unconventional oil field development in the country, CFO Simon Henry said October 27.
"Our appetite for gas remains very strong in North America. We can make money at current gas prices but there are also several attractive investment opportunities going forward," Henry told reporters on a conference call following the release of third-quarter earnings.
Henry said Shell is looking at the "long-term potential" of a GTL export plant on the Gulf Coast based on the same technology the company is using for its massive Pearl GTL project in Qatar.
He said a GTL project in the US, in addition to being very capital intensive, is dependent on the outlook for the long-term differential between US gas prices and global oil prices.
"We are doing some potential design work and we have even identified a couple of sites but we're at least six or seven years away even if we took the decision tomorrow," Henry told analysts on a second conference call.
Shell also is considering a project to export LNG from Canada to Asian markets and looking at the long-term economic attractiveness of gas-to-chemical projects using gas from its Marcellus Shale production in Pennsylvania, Henry said
Shell's comments come a day after the UK's BG Group became the first company to agree to a long-term deal to export LNG from the US, starting as early as 2015, as the US shale gas boom moves to turn the country into a net exporter (ON 10/27).
Last week Shell, with three major Asian partners, advanced plans to export LNG from Canada by acquiring a marine terminal near Kitimat on the northern British Columbia coast.
Henry also said Shell is considering entering a tight oil development project in the US in addition to its existing unconventional gas projects there.
"We tend to find that when we express an interest in an activity the price tends to go up so we've kept relatively quiet about this," Henry said. "You can take it that we are active, there are some interesting plays and as and when we pick up the acreage at acceptable prices we'll be more prepared to talk about it."
Last month, South Africa's Sasol proposed a GTL facility in Louisiana that would be larger than its 34,000 b/d Oryx plant in Qatar. Sasol, the world's top maker of motor fuel from coal, hopes to build a plant on a site near Lake Charles that could produce up to 96,000 b/d of naphtha and diesel.
Robert Perkins |
