Shell, TSC strengthen LNG collaboration

Shell's Prelude

Shell and TSC team up on future LNG projects

Shell Gas & Power Developments B.V. (Shell) and the Technip Samsung Consortium (TSC) have signed a heads of agreement to enhance collaboration on the design, engineering, procurement, construction and installation of future innovative FLNG facilities. The agreement builds on the existing relationship, formed in 2009, to ensure the parties can capitalize on insights gleaned from the design and construction of Shell's Prelude FLNG facility and expand the technology offering to the energy market. It will drive a culture of joint delivery, continuous improvement and ensure greater value from the collaboration for all parties.

Mr Thierry Pilenko, Chairman and CEO of Technip, commented: "Shell's FLNG vision and ambition is gaining momentum and Technip, with its partner Samsung Heavy Industries, is proud to support the additional projects that could be realized under this agreement. Technip has always been a pioneering company, and today we reach another milestone in this fantastic journey, truly supported by the commitment and the passion of all our people."

Mr Dae Young Park, President and CEO of Samsung Heavy Industries, said: "This heads of agreement will enable Samsung, together with partners, Shell and Technip, to further strengthen its reputation as a definite leader in the floating LNG business with the successful completion of FLNG projects to come. As CEO of Samsung Heavy Industries, I am very confident that Samsung is ready to construct multiple FLNGs at its Geoje shipyard and is fully committed to achieving the highest quality and on-time delivery of Shell's FLNG facilities in accordance with the spirit of the partnership."

Dr. Matthias Bichsel, Director of Shell Projects and Technology, added: "Shell is leading the industry in the development of FLNG. Together, Shell and TSC are forging a strong alliance to help ensure we are well positioned to deliver innovative FLNG solutions across a wide range of opportunities in the future. Central to this portfolio expansion are technology designs that cater for a wider range of gas fields. In locations where liquid production is low, for example, Shell's FLNG Lean technology would be able to process additional gas and produce more LNG, opening up new business opportunities for countries looking to develop their gas resources."

Global primary energy demand could double in the first half of the 21st century, and meeting this growth in demand will require large scale and sustained investment in all forms of energy. Natural gas, which is the cleanest burning fossil fuel, has an important role to play. Shell expects global natural gas demand to increase by 60% from 2010 to 2030, reaching 25% of the global primary energy mix and within that, strong growth in LNG. Floating LNG enables the development of gas resources ranging from clusters of smaller more remote fields to potentially larger fields via multiple facilities where, for a range of reasons, an onshore development is not viable. This can mean faster, cheaper, more flexible development and deployment strategies for resources that were previously uneconomic, or constrained by technical or other risks, helping to bring more natural gas to the market.

Shell and TSC are already working together on the world's first FLNG project, Prelude FLNG, which will be moored 200 kilometers off the North West coast of Australia in the Browse Basin. As their experience grows, Shell and TSC perceive that there are many opportunities ahead.