* $10 bln vessel being built to ferry Australia gas to Asia
* Shell also mulling mammoth LNG projects in Indonesia, U.S.
By Sarah Young
LONDON, Dec 5 Royal Dutch Shell, the
world's biggest LNG company, will move the headquarters of its
integrated gas business to Singapore from Europe as part of its
quest to feed Asia's surging demand for the fuel, the company
said on Wednesday.
"It will be the largest object man has ever built that
floats," Shell's upstream director Andrew Brown said of Prelude,
a 500 metre long vessel costing over $10 billion, being
constructed to supply Asian markets with gas from Australia.
"I think this really demonstrates where we see ... the
growth of the gas market. The growth of the integrated gas
business will be Asia-based," Brown told reporters at a
The headquarters of the integrated gas business, which
includes all Shell's gas and LNG projects outside of North
America, will move to Singapore once it has received approvals
from staff councils, Brown said.
The company is mulling more mammoth LNG projects akin to the
Prelude development, not only in Australia, but also Indonesia
and the U.S., Brown said, and is considering projects which
could almost double its current capacity to produce liquefied
natural gas (LNG).
LNG, a cooled form of the gas, allows the resource to be
shipped far from the rocks in which it is found, often to Asian
markets where there is strong demand and it fetches a higher
Shell, whose total production is split 50-50 between gas and
oil - a balance which Brown said the company would maintain, is
the world's biggest LNG company by annual tonnage, with 22
million tonnes per year currently onstream, putting it ahead of
its next biggest rivals Exxon, BP, Total
Forecasting soaring Asian gas demand in the coming decades,
Brown said other regions would step up to supply Asian markets
with LNG, adding to the current limited number of exporters.
"The next big wave will be North America and East Africa,"
Shell has already positioned itself to play a role in
planned projects to turn the U.S. and Canada into exporters of
LNG but so far does not have exposure to East Africa, after a
failed attempt to buy Mozambique-focused company Cove Energy
earlier this year.
Shale gas production in the U.S. has unlocked huge supplies
of the resource leading to a collapse in gas prices there, and
the export of LNG will mark a turnaround for a country where a
decade ago LNG import terminals were being built.
Some experts have said the advent of U.S. LNG exports to
Asia could undercut exports from more expensive LNG projects in
Australia, concerns partly shrugged off by Brown.
"Going forward floating LNG in that region (Australia) will
compete favourably with LNG exported from the U.S.," he said.
Noting the rising price tags of some LNG projects in
Australia, such as the Gorgon project in which Shell has a
stake, Brown said floating LNG projects such as Prelude, where
the associated infrastructure is on a vessel rather than land,
was one way to contain costs.