Shell Sanction LNG Canada In The Continued Drive For Gas
It seems you cannot talk to an oil and gas executive these days without the conversation turning to how the company is adapting to meet the requirements of the energy transition. The new world order in energy as every company strives to iron its environmental credentials firmly to the low carbon future mast.
At the recent BHGE event in Florence Harry Brekelmans, projects & technology director and member of the executive committee at Shell spoke about his company’s plans. “We want to keep pace with society, so our mission is limited to society’s progress towards meeting the aims of the Paris Agreement.
“As a result, our ambition is to cut our main carbon footprint by about half by 2015, and to about 20% by 2035. Only last month, we took another important step towards turning these ambitions into a reality. We committed to set specific net carbon footprint cards for shorter periods of three to five years, and we are looking to link them to executive remuneration.”
He believes that is an aim that will drive transformation in Shell’s portfolio through medium to long term, as they move to a mix of products with a lower carbon footprint. One critical element of that will be the growth of its gas business.
“We keep moving ahead, and only a few months ago, we announced that together with our partners, we had taken a final investment decision on LNG Canada, a major project in British Columbia, Canada. Construction is started, and first gas is expected by the end of the next decade or so.”
LNG Canada will initially export LNG from two processing units or trains totaling 14 million tonnes per annum (mtpa), with the potential to expand to four trains in the future. It is advantaged by access to abundant, low-cost natural gas from British Columbia’s vast resources and the relatively short shipping distance to North Asia, which is about 50% shorter than from the US Gulf of Mexico and avoids the Panama Canal. The LNG export facility will be constructed using proven industry technology on a large, partially developed industrial site with an existing deep-water port, roads, rail, and power supplies.
Brekelmans explained that LNG Canada is the right project, in the right place, at the right time. “Supplying natural gas over the coming decades will be critical as the world transitions to a lower carbon energy system,” he added. “Global LNG demand is expected to double by 2035 compared with today, with much of this growth coming from Asia where gas displaces coal.”
The project also highlights another of Shell’s key strategies, that of collaboration. “Partnerships are at the heart of this project to supply the design on behalf of five joint-venture partners, together with local communities and government,” he added. “We did that to be able to ensure that sustainable development is at the heart of each aspect of the project.
“One example of that, it is aimed to achieve the lowest carbon intensity of any energy project currently in operation.” Shell plan to achieve this using ultra-high efficiency turbines and the partial use of hydropower.
“We continue to make improvements in safety, in costs, in revenue, but also in cash flows and our carbon footprint,” Brekelmans said. “If we want to keep doing so, we must continue to collaborate, and at the same time continue to compete. We must accelerate our digital journey, but we also must drive performer standardization across each area of our business.
“To achieve the targets set out in the Paris Agreement we will need unprecedented collaboration and sustained collaboration, and not just for our industry, but also with governments, regulators, and across civil society. I think we all know that the challenge grows greater by the day.”
Last October, the intergovernmental panel on climate change published an updated perspective on how the world may meet a one-and-a-half-degree scenario. It calls for an extraordinarily rapidly transition, with the emissions falling significantly by the earlier parts of the next decade. “Human history shows that we can rise to our challenges,” Brekelmans concluded. “We can aim high, but we must believe in what’s possible.”