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Shell plans export gas plant at Gladstone

Matt Chambers | February 07, 2009

Article from: The Australian

OIL major Shell, a minor player in Queensland’s burgeoning liquid natural gas industry, plans to build an export plant at Gladstone.

Confirming speculation that the UK oil and gas giant was not content with a simple stake in coal seam gas (CSG) reserves, local partner Arrow Energy said bigger plans would be announced as soon as this quarter.

“Shell is in a big-picture play,” Arrow Australia chief executive Shaun Scott said in Brisbane. “We are working on … a medium to long term plan and you can expect it to be something significant.”

Asked if the plans would involve even more LNG units in Gladstone, Mr Scott replied: “Absolutely.”

As majors such as BG Group and ConocoPhillips have swooped on Gladstone, Shell has been a small, quiet investor.

It has a 30 per cent interest in Arrow’s local reserves after a $776 million deal struck this year. This compares with billions of dollars spent by each of the other groups.

Arrow’s other partner, LNG Ltd, is believed to have chosen its major shareholder, Norwegian shipper Golar, over Shell to take product from its planned LNG plant.

Arrow has a non-binding agreement to supply LNG Ltd’s plant, which will contain up to two LNG trains, each capable of handling 1.5 million tonnes a year.

Mr Scott said consolidation of the big projects was likely to occur down the track.

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