Released July 12, 2024 | SUGAR LAND
en
Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Energy supermajor Shell plc (NYSE:SHEL) (London, England) said it was building up its legacy in Abu Dhabi while at the same time investing in its own gas portfolio through a decision to take a 10% interest in the Ruwais liquefied natural gas (LNG) project.
Ruwais will consist of two liquefaction facilities, or trains, that will have a peak design capacity of 4.8 million metric tons (mtpa) each. Shell, for undisclosed terms, will take on a 10% interest in a project led by the Abu Dhabi National Oil Company (ADNOC).
Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Project Database can learn more by viewing the Ruwais project report. Shell has an 80-year legacy in the United Arab Emirates and already controls a 15% interest in an ADNOC gas processing unit.
"This investment decision builds on our long-standing partnership with ADNOC," said Wael Sawan, the chief executive officer of Shell. "In line with our strategy to create more value with less emissions, we are investing in additional LNG capacity and further growing our world-leading LNG portfolio, with energy-efficient and carbon-competitive projects."
Shell said the spending related to the acquisition will be absorbed into its capital guidance plans for the year, which it said remains unchanged. The company's capital expenditures during the first quarter totaled US$4.5 billion, relative to US$7.1 billion during the fourth quarter of 2023.
Total spending for the year could be in the US$20 billion range. Shell's integrated gas business generated US$3.7 billion in adjusted earnings for the first quarter, representing almost half of its total earnings.
Sawan, CEO since early 2023, has told shareholders he was focused on higher-profit endeavors, which was interpreted as a tacit move away from renewable energy and towards higher-carbon projects such as crude oil and natural gas.
Natural gas prices, however, remain somewhat suppressed and Shell said total adjusted earnings for the first quarter were impacted by market conditions for super-cooled LNG. Shell nevertheless said it also signed an offtake agreement to secure 1 million metric tons of product per year from the Ruwais facility.
Shell is not alone in expressing interest in Ruwais, with the likes of British supermajor BP joining the queue with a 10% stake in the project. With Russian products sidelined somewhat by Western-backed sanctions, companies are looking more to low-carbon LNG to meet their environmental commitments and to secure a reliable source of energy.
"Abu Dhabi's abundant gas reserves, the seventh largest in the world, are enabling UAE gas self-sufficiency, industrial growth and diversification, as well as helping meet growing global demand for gas as both a fuel and a feedstock," said Ahmed al-Jaber, ADNOC's managing director and chief executive officer.
ADNOC in June selected Technip Energies (Paris, France), alongside Japanese engineering company JGC Holdings Corporation (Kanagawa) and Middle East-focused NMDC Energy (Abu Dhabi), for engineering, procurement and construction (EPC) work at the planned facility at the Ruwais Industrial City that will export LNG.
The plant, the first of its kind in the Middle East and North Africa (MENA) region, will run on nuclear energy rather than gas turbines, supporting a broader decarbonization effort across the area. The latest EPC contract focuses on lowering the plant's emissions.
ADNOC picked Technip Energies to lead much of the EPC work at Ruwais after making a USUS$5.5 billion final investment decision (FID) on the two-train export facility at Ruwais. Khaled bin Mohamed bin Zayed Al Nahyan, the crown prince of Abu Dhabi, said the complex would also rely on artificial intelligence to improve efficiency and lower emissions.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth US$17.8 trillion (USD).
Ruwais will consist of two liquefaction facilities, or trains, that will have a peak design capacity of 4.8 million metric tons (mtpa) each. Shell, for undisclosed terms, will take on a 10% interest in a project led by the Abu Dhabi National Oil Company (ADNOC).
Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Project Database can learn more by viewing the Ruwais project report. Shell has an 80-year legacy in the United Arab Emirates and already controls a 15% interest in an ADNOC gas processing unit.
"This investment decision builds on our long-standing partnership with ADNOC," said Wael Sawan, the chief executive officer of Shell. "In line with our strategy to create more value with less emissions, we are investing in additional LNG capacity and further growing our world-leading LNG portfolio, with energy-efficient and carbon-competitive projects."
Shell said the spending related to the acquisition will be absorbed into its capital guidance plans for the year, which it said remains unchanged. The company's capital expenditures during the first quarter totaled US$4.5 billion, relative to US$7.1 billion during the fourth quarter of 2023.
Total spending for the year could be in the US$20 billion range. Shell's integrated gas business generated US$3.7 billion in adjusted earnings for the first quarter, representing almost half of its total earnings.
Sawan, CEO since early 2023, has told shareholders he was focused on higher-profit endeavors, which was interpreted as a tacit move away from renewable energy and towards higher-carbon projects such as crude oil and natural gas.
Natural gas prices, however, remain somewhat suppressed and Shell said total adjusted earnings for the first quarter were impacted by market conditions for super-cooled LNG. Shell nevertheless said it also signed an offtake agreement to secure 1 million metric tons of product per year from the Ruwais facility.
Shell is not alone in expressing interest in Ruwais, with the likes of British supermajor BP joining the queue with a 10% stake in the project. With Russian products sidelined somewhat by Western-backed sanctions, companies are looking more to low-carbon LNG to meet their environmental commitments and to secure a reliable source of energy.
"Abu Dhabi's abundant gas reserves, the seventh largest in the world, are enabling UAE gas self-sufficiency, industrial growth and diversification, as well as helping meet growing global demand for gas as both a fuel and a feedstock," said Ahmed al-Jaber, ADNOC's managing director and chief executive officer.
ADNOC in June selected Technip Energies (Paris, France), alongside Japanese engineering company JGC Holdings Corporation (Kanagawa) and Middle East-focused NMDC Energy (Abu Dhabi), for engineering, procurement and construction (EPC) work at the planned facility at the Ruwais Industrial City that will export LNG.
The plant, the first of its kind in the Middle East and North Africa (MENA) region, will run on nuclear energy rather than gas turbines, supporting a broader decarbonization effort across the area. The latest EPC contract focuses on lowering the plant's emissions.
ADNOC picked Technip Energies to lead much of the EPC work at Ruwais after making a USUS$5.5 billion final investment decision (FID) on the two-train export facility at Ruwais. Khaled bin Mohamed bin Zayed Al Nahyan, the crown prince of Abu Dhabi, said the complex would also rely on artificial intelligence to improve efficiency and lower emissions.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth US$17.8 trillion (USD).
