Shell has LNG dream to grow

Global giant Shell is eager to pump liquefied natural gas and related technology into Vietnam.

Thanh Le, general director of Shell Vietnam, told VIR that the world’s leader in manufacturing and exporting liquefied natural gas (LNG) saw Vietnam as having great energy investment potential.

“In South East Asia, Vietnam will surpass Malaysia and Thailand as a lucrative energy market. In Asia, big markets will be China,  India, Indonesia and Vietnam. Vietnam is one of Shell’s potential key markets,” Le said.

He said Shell wished to sell LNG to Vietnam and build a large offshore movable LNG terminal next to offshore oil rigs.

Under its plan, Vietnam’s government would begin importing LNG from 2014-2015 to fuel power plants. “We have worked with PetroVietnam to offer some help, as Shell is the world’s leading LNG maker and exporter,” Le said.

A terminal could be built in cooperation with the government and Shell can be a potential partner, he said.

Shell already built a terminal of this type offshore of Australia, which is the world’s first movable floating terminal. Shell also inked a deal with Indonesia recently to build a similar one and provide LNG to this nation.

Last month, the government gave the nod to PV Gas, an affiliate of state-run PetroVietnam, to build a depot for storing imported LNG in central Binh Thuan province’s Ham Tan district. The $1 billion project is expected to come online in the next few years and will receive three million tonnes of LNG annually.

Le said Shell Vietnam was working with PetroVietnam for possibilities for it to join this project, which was also coveted by some Japanese investors.

“We are effectively working with PetroVietnam. At present, PetroVietnam is doing a feasibility study. Shell Vietnam will continue working with other relevant agencies and commits to provide technical assistance [for the study],” he said.

Currently, locally-made LNG can meet part of Vietnam’s total demand, so Vietnam has had to import LNG from Thailand, Malaysia, Singapore, mainland China and Taiwan. However, foreign LNG sources have been shrinking due to strong LNG price fluctuations and exporters’ policy changes.

PV Gas reported that Vietnam’s LNG consumption was 810,000 tonnes last year and was expected to be one million tonnes by 2013.

PetroVietnam recently opened bidding for exploring and exploiting eight offshore blocks. Shell Vietnam was studying data of these blocks.

Le said Shell also wanted to buy into PetroVietnam’s Petec company to “more clearly understand how Vietnam’s oil and gasoline distribution market is going.”

Petec’s proposal to sell a 25-30 per cent stake to Shell was recently rejected by the government.

Le revealed that Shell would be one of the biggest marketers of ethanol worldwide and Vietnam had a great material source for the second generation ethanol technology.

“If the Vietnamese government more encourages usage of biofuel in Vietnam which makes the market size large enough, then ethanol manufacturing here would be our great interest.”

However, the firm currently shows no interest in constructing oil refinery projects in the country “due to Shell’s global policy changes,” though Shell once wanted to implement an oil refinery project in Vietnam.

Le warned that Vietnam would face big environmental challenges if it continued attracting projects to build coal-fired thermo-electricity plants, as these projects would emit toxic gas due to coal combustion. – VIR

Tags: Shell