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Libya’s Oil Production Could Double Within 5 Years

Libya’s Oil Production Could Double Within 5 Years

Frequent field outages and security…

Shell May Become First LNG Exporter To Hong Kong

Hong Kong

Shell is close to inking a long-term LNG supply deal with Hong Kong utility CLP Power, which would make the supermajor the first long-term exporter of the fuel to Hong Kong as it shifts away from coal and into natural gas.

The deal, according to sources who spoke to Reuters, is contingent on the company’s final investment decision on the construction of a floating import terminal featuring a regasification unit.

If Shell makes the decision, it will supply 1.2 million tons of LNG to CLP Power over a period of 10 years. The Anglo-Dutch company beat Malaysian Petronas to the deal, the sources said.

Hong Kong has the ambitious goal of switching half of its power generation capacity to natural gas as part of its commitments under the Paris Agreement. The switch should take place by 2020. As of 2012, natural gas accounted for 22 percent of Hong Kong’s power generating capacity.

The Shell deal could open up an attractive market for LNG exporters, especially since buyers in Asia have failed to take advantage of low prices, a Shell executive said earlier today.

“It’s quite interesting in that you could argue that buyers haven’t necessarily taken advantage of the buyer’s market because buyers haven’t done very many long-term deals,” Shell Energy executive vice president Steve Hill said at an event in Japan, adding I think what is our concern is that if deals aren’t done and projects aren’t sanctioned, eventually it won’t be a buyers’ market anymore because demand will grow and supply won’t.

Shell is currently preparing to launch its large-scale Prelude offshore LNG project in Australia. The project, which will have a production capacity of 3.6 million tons of LNG annually, with reserves at the Prelude and Concerto neighboring fields estimated at 3 trillion cu ft of gas. Shell says production from the Prelude field would be enough to meet 117 percent of Hong Kong’s annual gas demand.

By Irina Slav for Oilprice.com

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