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Hired guns protect Shell’s $9bn gas business

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(Lloyd’s List is one of the world’s oldest continuously running journals, having provided weekly shipping news in London as early as 1734.)

Energy shipping firm deploys armed guards despite LNG carriers’ smaller risk of piracy

Hal Brown – Friday 5 April 2013

PIRATES are very much a concern for Shell’s gas shipping operation, even though liquefied natural gas carriers are no easy target for attackers.

As Shell’s LNG vessel Mekaines loaded cargo last month in Ras Laffan , Qatar, it had already made preparations to pick up a team of armed guards.

The four guards, all ex-Royal Marines, joined the ship at Muscat in the Gulf of Oman, before the vessel sailed into the Arabian Sea, bound for the Isle of Grain in the UK.

That journey is increasingly important for the UK, where there are growing fears of gas shortages following an unusually cold spring in northern Europe.

It is also important for Shell , the energy shipping company that manages and operates Nakilat ’s fleet of more than 40 LNG carriers. Shell has made no secret of its focus on gas as a cleaner energy of the present and the future.

It expects global gas demand to increase by more than 60% from 2010-2030, or 2%-3% a year, driven by demand from the power and industrial sectors in Asia, the Middle East and the Americas.

Shell is one of the world’s largest liquefied natural gas producers, achieving annual sales of some 20m tonnes and holding an interest in ventures that supply more than 30% of global LNG.

Protecting its ships and cargoes is, therefore, of paramount importance.

In fact, there have been very few attacks on LNG carriers, due to the ships’ high freeboard, which makes it difficult for pirates to board.

On top of that, LNG carriers sail faster than many other ships.

Nevertheless, attacks do occur, such as when the Mitsui OSK Lines -operated ship LNG Aries was attacked off the coast of Oman last June.
Shell is acutely aware of such attacks and is taking no chances, despite the relatively low risk for gas carriers. It deploys armed guards on board its ships sailing from the Middle East Gulf.

With armed guards comes an extra weight of responsibility, however. Deploying any old ex-soldier with a gun just does not cut the mustard.

Shell head of shipping Grahaeme Henderson personally signs off on the use of armed guards for a particular voyage and did so for Mekaines.

He ensures he knows details that include the names of the guards and serial numbers of their weapons and ammunition. A Shell employee then gives the guards a final check before they board in Muscat.

For Mr Henderson, guards bring peace of mind.

After all, an LNG carrier represents more than $200m worth of kit and the cargo is valuable, particularly as countries such as Japan pay high prices for LNG.

With $9bn in earnings in 2012, up from $6bn the previous year, it is hardly surprising that Shell wants to protect its gas business.

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