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Copyright of Royal Dutch Shell Plc 1March 2011
GAS & LNG at SHELL
Andrei Kotov
Commercial Advisor – Global LNG
Club of Amsterdam
17 March 2011
Shell NTC, Amsterdam
Copyright of Royal Dutch Shell Plc 2March 11
The companies in which Royal Dutch Shell plc directly or indirectly owns investments are separate entities. In this presentation the expressions "Shell", "Group" and "Shell Group" are sometimes used for convenience where references are made to Group companies in general. Likewise the words "we", "us" and "our" are also used to refer to Group companies in general or those who work for them. The expressions are also used where there is no purpose in identifying specific companies.
The information contained in this presentation contains forward-looking statements, that are subject to risk factors which may affect the outcome of the matters covered. None of Shell International B.V., any other Shell company and their respective officers, employees and agents represents the accuracy or completeness of the information set forth in this presentation and none of the foregoing shall be liable for any loss, cost, expense or damage (whether arising from negligence or otherwise) relating to the use of such information.
All copyright and other (intellectual property) rights in all text, images and other information contained in this presentation are the property of Shell International B.V. or other Shell companies. Permission should be sought from Shell International B.V. before any part of this presentation is reproduced, stored or transmitted by any means.
DISCLAIMER STATEMENT
Copyright of Royal Dutch Shell Plc 3March 11
NATURAL GAS OUTLOOK
CCGT: COMBINED CYCLE GAS TURBINE
ATTRACTIVE ECONOMICS FOR ELECTRICITY PRODUCERS
NATURAL GAS ADVANTAGE: EXAMPLE CCGT
Abundant global gas resources ~250 years reserves at current production
CCGT: gas-fired power compared to coal:
40% more energy efficient
Emits 50-70% less CO2
CCS retrofit at similar cost per MWh
Better complements with wind power
CAPITAL COST TOTAL COSTS
NATURAL GAS DEMAND GROWTH
2,000
2,500
3,000
1990 2000 2010E
BCM
SOURCE: IEA
0 100 200 300
CCGT
Coal
Nuclear
Wind Onshore
Wind Offshore (25km)
Wind Offshore (75 km)
USD/MWh
Total Cost = Capital + Fuel + OperatingSource: DECC (Mott MacDonald) June 2010
Copyright of Royal Dutch Shell Plc 4March 11
THE CASE FOR GAS
Abundant global gas resources ~250 years reserves at current production (IEA)
CCGT: gas-fired power compared to coal:
40% more energy efficient
Emits 50-70% less CO2
CCS retrofit at similar cost per MWh
Better complements with wind power
Replacing coal with gas for electricity generation is the cheapest and fastest way to meet CO2
reduction targets
CCGT cheapest to build
Similar operating cost to coal and nuclear
ABUNDANT ACCEPTABLE AFFORDABLE
NATURAL GAS: A DESTINATION FUEL
0 100 200 300
CCGT
Coal
Nuclear
Wind Onshore
Wind Offshore (25km)
Wind Offshore (75 km)
USD/MWh
CCGT: Combined Cycle Gas TurbineTotal Cost = Capital + Fuel + Operating
Source: DECC (Mott MacDonald) June 2010
32
233
NorthAmerica
133155
Eurasia
133
19
Middle East
31
274
Asia Pacific
32
107
Africa
2535
Europe
22
98
LatinAmerica
Conventional Gas Resources (tcm) Unconventional Gas Resources (tcm)
CCS: Carbon Capture & Storage
Copyright of Royal Dutch Shell Plc 5March 11
THE NATURAL GAS VALUE CHAIN
(4) Gas LiquefactionRemoval of contaminants, NGLs
extraction Cooling to –160oC at atm.pressure
(5B) LNG Transport–161oC, atmospheric
pressure
(6) RegasificationReturn to gaseous state
(1) Gas Exploration & Production
(3) Gas Transport
Industry
Space heating/cooking
(5A) Onshore Pipeline Gas TransportHigh pressure, ambient temperature
(2) Gas Treatment Oil/water/solids removal
Power(7) Gas Transport &
DistributionHigh pressure, ambient
temperature
Copyright of Royal Dutch Shell Plc 6March 11
2008 2015
LNG importersLNG exporters
LNG importersLNG exporters
Source: Wood Mackenzie LNG (April 2010)
GLOBAL LNG MARKET DEVELOPMENTS
2008 2015 est. % increase
# LNG importing countries 19 ~30-35 75%
# LNG exporters countries 15 ~20 25%
LNG demand (mtpa) 170 ~280 65%
Copyright of Royal Dutch Shell Plc 7March 11
WHAT IS LNG?
Cost effective alternative to pipeline for distance > ~3000 km
WORLD LNG PRODUCTION IN 2009= ~181 MILLION TONNES
Production
Natural Gas production and
separation from oil & water (when
present)
Liquefaction
Natural Gas cooled to liquid state at -160oC and atm.
Pressure(volume reduced
600 fold)
Shipping
LNG transported over long distances
in purpose built tankers
Source: Gas Matters
Regasification
LNG returned to gas state and injected into the transport
pipeline network for distribution & sales
Copyright of Royal Dutch Shell Plc 8March 11
INTEGRATED NATURAL GAS LEADERSHIP
Among International Oil Companies.
Leader in LNG and gas conversion technologies
EXPLORATION & PRODUCTION TECHNOLOGYLIQUEFACTION
LNG SHIPPING
REGAS, PIPELINES, STORAGE
MARKETING & TRADING
Largest ship operator
One of the World’s largest gas producers
Largest LNG supplier
Strategic positions…active portfolio management
Global positions & capabilities
Copyright of Royal Dutch Shell Plc 9March 11
Mexico
Canada
United States Italy
GermanyNetherlands
NorwayDenmark
UKIreland
United States
Argentina
Brazil
Canada
Kazakhstan
Pakistan
SyriaIran
QatarSaudi
Egypt
New Zealand
Australia
Brunei
Malaysia Philippines
China
Russia
Gabon
Nigeria
SHELL’S GLOBAL UPSTREAM GAS PORTFOLIO
One of the worlds largest oil and gas producers*
Largest equity LNG Supplier*
Global access to strategic markets
Profitable growth
* Amongst International Oil Companies
GAS ONLY PROJECTSOIL AND GAS PROJECTS
LNG VENTURESREGASIFICATION POSITIONS
Copyright of Royal Dutch Shell Plc 10March 11
SHELL’S GLOBAL LNG PORTFOLIO
ACCESS TO KEY STRATEGIC MARKETS
SPAIN HAZIRABAJA DUBAI
ELBA ISLAND
ALTAMIRA
COVE POINT
PLUTO (WOODSIDE)*
SAKHALIN II
MALAYSIA LNG
BRUNEI LNG
NORTH WEST SHELF
QATARGAS 4 OMAN LNG QALHAT*NIGERIA LNG GORGON LNG* Indirect interest
REGAS POSITION - OPERATIONLNG - CONSTRUCTIONLNG - OPERATION
REGAS POSITION - CONSTRUCTION
Copyright of Royal Dutch Shell Plc 11March 11
SHELL’S GLOBAL LNG SUPPLY PORTFOLIO
LNG - OPERATION LNG - CONSTRUCTION
Malaysia LNG14.6 MTPA
North West Shelf16.3 MTPA
Photo courtesy of Woodside Energy Ltd.
Brunei LNG7.8 MTPA
Sakhalin T1 & 29.6 MTPA
Nigeria LNG21.6 MTPA
Qatargas 47.8 MTPA
QALHAT
Oman and Qalhat*10.8 MTPA
Pluto (Woodside)*4.3 MTPA
Photo courtesy of Woodside Energy Ltd.
SIX PROJECTS IN OPERATION & THREE NEW PROJECTS UNDER CONSTRUCTION
Gorgon15 MTPA
* Indirect Interest
