Saad Sherida Al Kaabi, Qatar Petroleum’s President and CEO, and Ben van Beurden, Shell’s Chief Executive Officer, at the signing ceremony.
Doha: Qatar Petroleum’s Wave LNG Solutions and Shell Gas & Power Developments (Shell) today signed a framework agreement to develop liquefied natural gas (LNG) marine fueling – or bunkering – infrastructure at strategic shipping locations across the globe.
LNG bunkering provides the shipping industry with a new fuel that helps meet the industry’s environmental and economic objectives. Increasing numbers of ship owners and operators are turning to LNG over traditional marine fuels in response to tighter sulfur and nitrogen oxide emissions regulations. In October 2016, the International Maritime Organization (IMO) announced the introduction of a global 0.5% sulfur cap from 2020.
Commenting on the occasion, Saad Sherida Al Kaabi, Qatar Petroleum’s President and CEO, said: “we are pleased to team up with our long term partner and industry pioneer, Shell, on this important initiative. We view LNG bunkering as a promising opportunity for LNG to further grow as a clean energy source.”
Al Kaabi added: “LNG demand for bunkering is expected to increase significantly over the coming years and we believe there is real potential for such demand to reach up to 50 million tons per annum by 2030. Obviously, achieving this figure requires focused investments and the right partnership model, similar to the one we are establishing today.”
On his part, Ben van Beurden, Shell’s Chief Executive Officer, said: “as two of the world’s leading LNG suppliers, Shell and Qatar Petroleum have the capability and experience to deliver LNG as a marine fuel to ship owners and operators who must meet tougher emissions regulations from 2020. We look forward to working with Qatar Petroleum to increase the availability of LNG as a fuel for transport.”
Tuesday’s agreement follows two Memoranda of Understanding (MOUs) Shell and Qatargas signed with industry partners in 2016 to explore LNG bunkering opportunities in the Middle East. Pursuant to the agreement signed today, Qatar Petroleum and Shell will evaluate and progress the development of LNG bunkering facilities at various locations across Europe, the Middle East and East Asia.
Qatar Petroleum and Shell: A History of Strategic Cooperation
Shell is a strategic partner of Qatar Petroleum. Shell's investments in the Qatari oil and gas sector are estimated at about $20 billion, and are considered among the highest investments of foreign companies in the State of Qatar. In addition, both Qatar Petroleum and Shell have several international partnerships.
Partnerships in Qatar:
1. Pearl Gas to Liquids (GTL)
Pearl GTL is the world’s largest GTL plant. The integrated asset produces 1.6 billion cubic feet of wellhead gas per day from the North Field, and converts it onshore into 140kb/d of GTL products that comprise principally of GTL gasoil, naphtha, kerosene, normal paraffins, and high quality base oils for lubricants. In addition, Pearl GTL produces 120kboe/d of upstream products, such as ethane, LPG and condensate. Shell is the contractor and operator of the project under a production sharing agreement.
2. Qatargas 4
Qatargas 4 (QG-4) is an integrated LNG asset producing approximately 1.4 billion cubic feet per day of natural gas and processing it into 7.8 million tons per year LNG from Qatar’s North Field. Shell is a 30% shareholder, whilst QP holds 70%.
International Partnerships:
1. BC-10 in Brazil
A subsidiary of Qatar Petroleum owns a 23% stake in Brazil's BC-10 offshore project, in which Shell holds a 50% stake and the remaining 27% is owned by the Indian Oil and Natural Gas Corporation. The project currently produces around 45,000 barrels of oil equivalent per day.
2. Singapore Petrochemical Project
A subsidiary of Qatar Petroleum owns jointly with Shell share in two petrochemical companies in Singapore, the Singapore Petrochemical Corporation (50%) and Polyolefin Company (Singapore) (30%).
3. LNG Marine Fuelling
Qatar Petroleum and Shell will jointly set up a joint venture for investing in LNG marine fueling (or bunkering) infrastructure at a number of ports around the world in Europe, the Middle East and East Asia. This is a promising opportunity for promoting LNG as a clean fuel for ships considering the more stringent environmental regulations to be applied to the shipping industry as from 2020.
LNG Purchase for Qatar:
Shell purchases LNG from Qatargas 4 under long-term contracts for supply to PetroChina in China (3 million tons per annum) and Dubai Supply Authority (UAE) (0.65 million tons per annum). It also purchases spot cargoes from both Qatargas and RasGas.
