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Researched by Industrial Info Resources Australia (Perth, Australia)--Royal Dutch Shell (NYSE:RDS.A) (The Hague, Netherlands) plans to acquire BG Group plc (LSE:BG) (London, England) for about $70.1 billion. The sale is expected to be finalized in early 2016. The acquisition affects BG Group's Australian business, including the newly operational Queensland Curtis Liquefied Natural Gas (QCLNG) production plant and all associated upstream, midstream and downstream operations.
Production at the QCLNG plant began in December. The QCLNG project was the first natural gas liquefaction facility to convert coal seam gas (CSG) to liquefied natural gas (LNG). (CSG also is known as coal bed methane (CBM) in the U.S.) Industrial Info tracked the AU$20.4 billion ($16 billion) project while it was under development and continues to report on operational plant activity.
Shell has been working through a front-end engineering and development (FEED) phase for many years on the Arrow Upstream CSG development projects, which were intended in the past to supply the recently cancelled Arrow Energy LNG production project. The natural gas extracted from these many CSG fields will now be developed for supply to future expansion of the QCLNG production plant.
Shell and PetroChina (NYSE:PTR) (Beijing, China) developed a 50:50 joint venture in 2010 to acquire Arrow Energy and, with it, the company's coal-seam gas empire throughout the Bowen and Surat Basins, Queensland, Australia. The proposed Arrow LNG Project would have been in competition with the other three LNG production plants on Curtis Island--QCLNG, APLNG and GLNG--in a number of ways.
The high demand for skilled labor and exhaustion of housing and resources meant that, for some time, starting construction would be a challenge. LNG supply and demand were an issue. The global marketplace was likely to become flooded, and reaching sales agreements in times of high Australian LNG prices was deemed to be a challenge. High costs of project development were imminent. In January, Shell announced that the Arrow LNG project was cancelled; the news came as no surprise.
Industrial Info had heard for more than a year that the Shell and PetroChina joint venture was likely to cancel the Arrow LNG production plant. The rumor was that the Arrow Energy upstream projects in the Surat and Bowen Basins would all go ahead, once an agreement was in place with one or more of the other three CSG-LNG projects under development on Curtis Island.
Shell is making a concerted effort globally to focus on LNG production and upstream gas globally. Shell sold up all of its refining and petroleum products storage and distribution Australian businesses to Vitol Group (Geneva, Switzerland) in February. The purchase of BG Group will expand the natural gas and LNG business exponentially; with the Prelude Floating LNG project to be brought online in early 2017 as well, Shell's place in Australia will be elevated to No. 1 of the few on top. The Prelude FLNG Facility will be moored about kilometers off the coast in northern Western Australia, near the Northern Territory.
The Arrow Energy upstream assets will suffice to allow for expansion of the QCLNG production plant to three trains and beyond.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Production at the QCLNG plant began in December. The QCLNG project was the first natural gas liquefaction facility to convert coal seam gas (CSG) to liquefied natural gas (LNG). (CSG also is known as coal bed methane (CBM) in the U.S.) Industrial Info tracked the AU$20.4 billion ($16 billion) project while it was under development and continues to report on operational plant activity.
Shell has been working through a front-end engineering and development (FEED) phase for many years on the Arrow Upstream CSG development projects, which were intended in the past to supply the recently cancelled Arrow Energy LNG production project. The natural gas extracted from these many CSG fields will now be developed for supply to future expansion of the QCLNG production plant.
Shell and PetroChina (NYSE:PTR) (Beijing, China) developed a 50:50 joint venture in 2010 to acquire Arrow Energy and, with it, the company's coal-seam gas empire throughout the Bowen and Surat Basins, Queensland, Australia. The proposed Arrow LNG Project would have been in competition with the other three LNG production plants on Curtis Island--QCLNG, APLNG and GLNG--in a number of ways.
The high demand for skilled labor and exhaustion of housing and resources meant that, for some time, starting construction would be a challenge. LNG supply and demand were an issue. The global marketplace was likely to become flooded, and reaching sales agreements in times of high Australian LNG prices was deemed to be a challenge. High costs of project development were imminent. In January, Shell announced that the Arrow LNG project was cancelled; the news came as no surprise.
Industrial Info had heard for more than a year that the Shell and PetroChina joint venture was likely to cancel the Arrow LNG production plant. The rumor was that the Arrow Energy upstream projects in the Surat and Bowen Basins would all go ahead, once an agreement was in place with one or more of the other three CSG-LNG projects under development on Curtis Island.
Shell is making a concerted effort globally to focus on LNG production and upstream gas globally. Shell sold up all of its refining and petroleum products storage and distribution Australian businesses to Vitol Group (Geneva, Switzerland) in February. The purchase of BG Group will expand the natural gas and LNG business exponentially; with the Prelude Floating LNG project to be brought online in early 2017 as well, Shell's place in Australia will be elevated to No. 1 of the few on top. The Prelude FLNG Facility will be moored about kilometers off the coast in northern Western Australia, near the Northern Territory.
The Arrow Energy upstream assets will suffice to allow for expansion of the QCLNG production plant to three trains and beyond.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
