Shell promises more value, less emissions

Shell PLC which owns 45% of the restructured Atlantic LNG plant in Pt Fortin and is Trinidad and Tobago’s second-largest natural gas producer, plans to grow its global liquefied natural gas (LNG) business by between 20 and 30% by 2030, compared to its 2022 portfolio.

In 2022, Shell’s share of Atlantic’s LNG’s output was 4.4 million tonnes or 15% of its global production.

The company recently updated its energy transition strategy, effectively scaling back its carbon emission targets and ending a previously announced goal of further reducing its carbon footprint by 2035.

Instead, Shell is doubling down on its LNG business, promising to develop new projects with lower carbon intensity.

“We plan to grow our LNG business by 20-30% by 2030 compared with 2022. We are developing new projects with lower carbon intensity by using renewable power and carbon abatement technology in the form of carbon capture and storage,” the company said in its strategy document.

Shell is the world’s largest LNG trader and promised to increase its trading portfolio by buying additional production to add scale and flexibility, the company said.

“Our LNG business will remain a key priority for Shell, meeting continued strong demand, especially in Asia where we send most of our shipments today. As we grow our LNG business we will be targeting opportunities that have an internal rate of return of 11% or higher,” the strategy read.

With increasing pressure on companies to decarbonise, Shell said it sees a move away from coal and to LNG as a major decarbonising effort.

“It is the lowest-carbon fossil fuel, producing around 50% less carbon emissions than coal when used to generate electricity, according to the International Energy Agency. Compared with coal, LNG emits far lower amounts of sulphur dioxide, nitrogen oxide, and other compounds that contribute to local air pollution,” the company argued.

Shell said there are many opportunities for industries to cut carbon emissions by switching from coal to natural gas and LNG.

Coal, it said, accounts for more than 60% of the energy used across Asia to power heavy industries such as steel.

“LNG is the lowest-carbon marine fuel available at scale today and offers significant greenhouse gas (GHG) emissions reductions compared with conventional fuels. LNG also offers a long-term decarbonisation pathway through bio-LNG when the supply is scaled up. Shell has developed the world’s largest LNG fuelling network of ports and bunker vessels on key trading routes, enabling more customers to choose LNG,” Shell said.

Methane emissions

According to the company LNG provides both energy security and flexibility because it can be easily transported to places where it is needed most.

One of the challenges that T&T and the National Gas Company (NGC) have been facing is the leakage of methane from natural gas and its impact on the environment.

Shell admitted that this is a global challenge for its operations and that to deliver the full GHG benefits of LNG, methane emissions must be minimised.

“We are working with partners, industry and universities to develop and implement technologies that reduce methane emissions associated with the use of LNG…As we grow our LNG business, we continue to make the reduction of methane emissions a priority. We were one of the first companies to set a target to achieve near-zero methane emissions by 2030 across all our operations,” Shell reminded.

The company said through more efficient new plants, and projects to reduce methane emissions from existing assets and its shipping fleet and the plan is to deliver LNG with some of the lowest methane emissions in the industry.

By the end of 2023, Shell said it had achieved more than 60% of its target to reduce its total methane emissions by 70%.

According to Shell in 2023 it invested US$5.6 billion in low-carbon solutions, including the acquisition of Nature Energy, one of the largest producers of renewable natural gas in Europe.

“Shell will reduce emissions over time as our product mix evolves to meet changing customer demand. We will continue to produce LNG and oil with fewer emissions, while the mix of our sales will move more towards low-carbon solutions such as biofuels, renewable energy, and hydrogen, and away from oil products such as petrol, diesel and jet fuel into the 2030s,” the company said.

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