Tuesday, March 5, 2013

Shell to Build LNG Plants for Transportation Fuels

Shell announced today that it is going forward with two small scale natural gas liquefaction plants on the Mississippi River in Geismar, LA to serve the Gulf of Mexico and Intra-Coastal waterway and in Sarina, Ontario, Canada to serve the Great Lakes region.  Here is a blurb from the company's press release about the Louisiana facility:
"In the Gulf Coast Corridor, Shell plans to install a small-scale liquefaction unit (0.25 million tons per annum) at its Shell Geismar Chemicals facility in Geismar, Louisiana, in the United States. Once operational, this unit will supply LNG along the Mississippi River, the Intra-Coastal Waterway and to the offshore Gulf of Mexico and the onshore oil and gas exploration areas of Texas and Louisiana. To service oil and gas and other industrial customers in Texas and Louisiana, Shell is expanding its existing relationship with fuels and lubricants re-seller Martin Energy Services, a wholly-owned subsidiary of Martin Resource Management Corporation (MRMC). MRMC and its publicly traded affiliate, Martin Midstream Partners L.P. will provide terminalling, storage, transportation and distribution of LNG."
Shell is the world leader in LNG for export, a status affirmed by last week's announcement that it will buy the LNG assets of Spanish company Repsol, SA for $4.4 billion.  The Repsol deal gives Shell better economics to export its own gas from places like Peru and Trinidad and Tobago.  If LNG export doesn't work out in the U.S. because of political pressures, at least Shell has an export outlet to capitalize on the imbalance of natural gas prices worldwide.

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