Shell, CPC reach long-term LNG supply deal

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

HOUSTON, May 16 -- Shell Eastern Trading (Pte.) Ltd., trading as Shell Eastern LNG, and CPC Corp., Taiwan, have signed a heads of agreement for long-term supply of LNG from Shell’s global LNG portfolio. Under the agreement’s terms, Shell will supply 2 million tonnes/year for 20 years starting in 2016.

This is the first long-term LNG deal between Shell and CPC, the companies said, and makes Shell one the main suppliers of LNG to Taiwan. The terms of the HOA provide for CPC and Shell to work to conclude detailed sale and purchase agreements in the coming months.

Agreements were signed recently by CPC and Shell in Taipei and Singapore, respectively, and “exchanged by the parties” in Taipei, an announcement said. The announcement did not specify which supply projects might be contracted to fulfill the agreements.

Another Shell unit, Shell Development (Australia) Proprietary Ltd., plans the world’s first floating LNG from Shell’s Prelude development off Western Australia to start up in 2016 with planned export capacity of less than 1 million tpy (OGJ, Mar. 7, 2011, p. 100).

In addition, Shell holds an interest in the planned Sunrise project, also to employ floating liquefaction, to ship 4 million tpy. That targeted start-up, however, is 2017 at the earliest.

OGJ data show CPC currently operates nearly 21 million tpy at two terminals. The more recent started up in 2009.

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

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