Royal Dutch Shell expanding gas business in SEA

RAS LAFFAN, Qatar - Royal Dutch Shell, the global energy giant, is eyeing to expand its gas business presence in Southeast Asia, including the Philippines, as part of efforts to strengthen its overall gas business, officials said in a media briefing here.

In a briefing with journalists from across the globe at Shell’s Pearl Gas-to-Liquid (GTL) plant here, the world’s largest GTL project, company officials said Shell is looking to expand not just in the oil and gas-rich Middle East region but in Southeast Asian countries as well.

“We continue to explore new gas resources in the area,” said Maarten Wetselaar, executive vice president for integrated gas of Shell Upstream International in a teleconference with journalists.

While he declined to provide specifics, Wetselaar said there are possible opportunities in the gas and related businesses in Brunei, Malaysia, Indonesia, and even in the Philippines.

“In the Philippines, we’re looking at opportunities such as the regasification terminal,” said Wetselaar, referring to the potential of putting up an import regasification terminal for liquefied natural gas (LNG).

This would be adjacent to its existing refinery facility in Batangas.

Last year, Pilipinas Shell Petroleum Corp. said the construction of an LNG terminal may require an investment of up to $1 billion.

In June 2012, the Philippine government and Shell signed a memorandum of understanding that called for the conduct of a technical feasibility study to determine the viability of the development, construction and operation by Shell of an import regasification terminal.

Wetselaar said demand for gas is expected to surge in the region along with steady economic growth, and as governments look for additional sources of power.

Shell’s Pearl GTL plant, 100 percent funded by Shell with a development cost of $18 to $19 billion, has made Qatar the GTL capital of the world.

The plant has a capacity to produce 140,000 barrels of GTL per day and 120,000 barrels of natural gas liquids and ethane.

Located 80 kilometers north of Doha, the Pearl GTL plant is a massive and complex city of steel standing on an area as big as 35 football fields at the Ras Laffan Industrial City.

It is a fully integrated upstream to downstream, world-scale project that captures the full value chain from offshore development through onshore gas processing to refining of finished products in one project.

Developed in two phases, the project’s major construction works were completed in 2010. The first phase started in early 2011 and exported the first commercial shipment of gasoil in June 2011.

In a separate briefing in Doha, Wael Sawan, managing director and chairman of Qatar Shell, said the company is looking at tapping the growing economies of the Asian region as its market for GTL products.

“We are looking at East in totality. The biggest element we see is that the less well-off in many countries around the world begin to climb up the latter. Economic growth will play a role so there is going to be a significant growth in demand,” Sawan said.

GTL products include GTL gasoil, a diesel-type fuel that will help diversify the supply of diesel fuels; GTL base oils, used in lubricants that keep vehicle engines operating smoothly as well as GTL kerosene.

Other products are GTL normal paraffin, used in the production of detergents such as washing powder and soap and GTL naphtha, an alternative feedstock to conventional naphtha for chemical plants.