Only a Fraction of LNG Export Projects Will be Built: Shell

Posted by George Backwell
Monday, June 09, 2014
Shell Prelude rendering courtesy of Shell

Only a fraction of the natural gas export projects being developed around the globe will become reality as high costs and weakening gas prices torpedo those that until recently promised huge returns on investment.

Large natural gas field discoveries on and offshore have prompted several countries to plan liquefied natural gas (LNG) export projects, including in North America, Australia, East Africa and the east Mediterranean.

But high development costs and low profit margins in the gas sector mean most of the projects will fail, Royal Dutch Shell's director of projects and technology told Reuters in an interview. "There is always so much talk about these big LNG projects around the world, but only a small fraction of them will get built," said Matthias Bichsel, who is also a member of Shell's Executive Committee.

"Costs in the oil and gas sector are still on the rise and outpacing inflation, and gas projects are extremely price-sensitive because the margins are so thin," he added.

European forward gas prices, which are used to make investment decisions for big pipeline and gas field projects, have dropped more than 15 percent since the beginning of the year.

They are close to five-year lows, and most analysts expect further declines as new producers flood markets with gas. Analysts have said many new gas projects will struggle to make the return on investment necessary to receive the required financing.

In Asia, where 70 percent of global LNG trading takes place, spot LNG prices have fallen more than 35 percent this year to their lowest since late 2012.

(By Henning Gloystein)

Maritime Reporter July 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Contracts

Canada Commissions Study on Underwater Noise

Green Marine has signed a nine-month contract with Transport Canada to provide insight on underwater noise generated by shipping and its effects on marine life, along with potential solutions.

Asia-Europe Box Rates Down 23 pct

Shipping freight rates for transporting containers from ports in Asia to Northern Europe dropped 22.8 percent to $400 per 20-foot container (TEU) in the week ended last Friday,

RI Offshore Project Boosts US Wind Entry

Rhode Island's Deepwater Wind will start installing the foundations for North America's first offshore wind farm on Monday, a milestone the company says could pave

Finance

SBM Offshore Completes $1.55 bln FPSO Financing

SBM Offshore announced it has today completed the project financing of FPSO Cidade de Saquarema for a total of $1.55 billion, marking the largest project financing in the company's history.

NAT Buys 2 Suexmax Tankers

Nordic American Tankers Limited (NAT) acquires two modern Suezmax tankers, increasing the fleet to 26 vessels    Tanker shipping company NAT announced that it

Rolls-Royce Bolsters R&D for MTU Engines

New R&D test facilities in Friedrichshafen already in service; 40 million euros invested for greater fuel economy and lower emissions    Rolls-Royce Power Systems

LNG

FERC Approves Excelerate’s Offshore GasPort

Excelerate receives approval to move forward with the construction and operation of LNG terminal   On July 24, 2015, the U.S. Federal Energy Regulatory Commission

ABS Grants AIP for Jensen’s LNG ATB Design

A Jensen Maritime-designed, liquefied natural gas (LNG)-bunkering articulated tug-barge (ATB) has been granted approval in principle (AIP) by classification society American Bureau of Shipping (ABS).

Asian LNG Spot Climbs as Jordan, Pakistan Buy

Asian liquefied natural gas (LNG) spot prices for September delivery were higher on Friday supported by nearby demand from new importers including Jordan and Pakistan, traders said.

Offshore Energy

NOIA Applauds RI Offshore Wind Project

National Ocean Industries Association (NOIA) president Randall Luthi issued a statement congratulating “steel in the water” for Deep Water Wind’s Block Island Wind Farm,

CAPE Holland Deploys New Vibro Lifting Tool

Earlier this week, during its first commercial application, the newly developed Vibro Lifting Tool (VLT) of CAPE Holland has successfully installed four piles in up to 90 meters water depth.

FERC Approves Excelerate’s Offshore GasPort

Excelerate receives approval to move forward with the construction and operation of LNG terminal   On July 24, 2015, the U.S. Federal Energy Regulatory Commission

Underwater Engineering

IMCA Appoints Faure as President

Bruno Faure, Group Senior Vice President Subsea Projects and Operations at Technip  has taken over the role of President of the International Marine Contractors Association (IMCA),

Seabed Geosolutions Bags Two Contracts

Seabed Geosolutions will soon mobilise for the variation order that was signed today by Abu Dhabi National Oil Company (ADNOC) with CGG to conduct a shallow water seabed survey.

Shell Gets APD for limited Arctic Drilling

After extensive review and under a robust array of safety requirements, Bureau of Safety and Environmental Enforcement (BSEE) Director Brian Salerno today announced

 
 
Maritime Contracts Maritime Security Maritime Standards Navigation Offshore Oil Pod Propulsion Port Authority Salvage Ship Electronics Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1631 sec (6 req/sec)