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Gastech: Shell sees critical roles for natural gas, LNG

Warren R. True
Chief Technology Editor-LNG/Gas Processing

AMSTERDAM, Mar. 22 -- Natural gas, and LNG especially, will play critical roles in meeting global energy demand to 2050 during which time the world must reduce greenhouse-gas emissions by half, according to Malcolm Brinded, executive director for upstream international, Royal Dutch Shell PLC.

His forecast came in a gas leadership panel Mar. 21 at Gastech in Amsterdam and in remarks during a follow-on press conference Mar. 22.

Brinded also addressed the potential for LNG exports from North America as well as Shell’s efforts to move additional LNG cargoes into Japan to help alleviate its shortage of power-generation fuels.

Gas, LNG growth
Global energy demand will grow by 40% by 2030, said Brinded, and likely will double by 2050. The “hard truth” is that hydrocarbons will continue to be the most important source of energy to 2050 and beyond, he said. By 2050, fossil fuels will still meet more than 60% of global energy demand.

While it is meeting twice as much energy demand, on the one hand, the world by 2050 must also reduce GHG emissions by half.

Current LNG demand growth is 6-10%/year, he said, well ahead of natural gas growth, which itself is ahead of oil growth. This trend is driven by growing gas dependency of, especially, China and Europe, said Brinded.

By 2020, LNG could be meeting 20% of global gas demand, going a long way toward mitigating concerns over supply security, especially in Europe, which depends heavily on an interconnected system imports and domestic production. Globally, the number of LNG importing countries will increase by a third by 2015.

In the last few days, Brinded also said, Shell has moved 6-10 LNG cargoes into Japan, some of which were incremental to contracted shipments. For the next 3 months, contractual commitments limit Shell’s ability to increase LNG cargoes into Japan. But beyond 3 months the company’s flexibility to send incremental shipments grows. “Whatever Japan needs [the LNG] industry will supply,” said Brinded.

Effects of unconventional, GTL
Unconventional gas, said Brinded, will not be the “game changer” in Europe that it has been for North America, but the European dependency on domestic conventional production is falling. Interconnectivity of supply to Europe is critical, he said.

Chinese gas demand will double or perhaps even treble by 2020, said Brinded. This is supporting rapid LNG growth as well as expansion of unconventional gas development, especially in western regions.

LNG exports from North America and, specifically the US, resulting from the gas surplus resulting from unconventional gas production, could occur, he said, and expand without affecting the US market.

When asked if Shell sees other gas-to-liquids opportunities once its Pearl GTL project in Qatar starts up later this year, Brinded did not specify North America but said there is an “industrial logic” for GTL wherever a large gap exists between natural gas prices and liquids prices.

Contact Warren R. True at warrent@ogjonline.com.


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