CEO Peter Voser Says Shell Plans to Invest $20 Billion in LNG, GTL

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Researched by Industrial Info Resources (Sugar Land, Texas)--Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, Netherlands) plans to invest $20 billion in liquefied natural gas (LNG) and gas-to-liquids (GTL) in the coming years. Shell, Europe's largest energy company by market capitalization, expects LNG demand to double to 400 million tons per annum by 2020 from 200 million today, after having already doubled over the first decade of this century.

The company expects global natural gas demand to increase by 60% from 2010 to 2030, reaching 25% of the global primary energy mix. Meeting this demand will require at least $700 billion of investments.

Shell expects European LNG demand could, with an appropriate policy in place, rise to 100 million tons by 2020. The company will expand its LNG production capacity from 22 million to 29 million tons per annum with new LNG capacity expansion in Australia.

"We are aiming to develop profitable new gas supplies to meet the market's growing demand for clean and affordable low carbon," said Peter Voser, the CEO of Shell.

"Strong growth in gas markets, especially integrated gas, is a major opportunity for Shell and our shareholders," he said in a statement. "Our Integrated Gas earnings have more than trebled in the last five years, reaching $9 billion over the last year, driven by liquefied natural gas and gas-to-liquids, and we see growth opportunities to invest over $20 billion here for 2012-15."

Separately, Simon Henry, the chief financial officer (CFO) of Shell, said that Europe needs to draw a roadmap for LNG usage over the long term. "Europe needs to have a long term perspective or vision in terms of where gas fits into its energy policy," he said in an interview with Financial Times. "If you want the gas, you have to be sure that suppliers long-term are committed to send it to you." Europe has become increasingly reliant on imports, including LNG from countries such as Qatar, as domestic production of oil and gas declines.

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