Royal Dutch Shell sees its liquefied natural gas as core to its long term plans. It remains undaunted by hefty write downs on its Australian gas assets.
Also core to its long term plans is Royal Dutch Shell’s “new energy” acquisitions Down Under. This was a statement from the Australian unit’s chairman about these commodities on Tuesday.
Europe’s biggest oil company aims for net zero emissions from its operations by 2050. Moreover, it plans a major restructuring.
Shell still sees gas as a crucial part of the puzzle. Around a quarter of its gas assets are in Australia.
Shell booked $11 billion in writedowns on its gas business in July. Mostly, it was on its Australian Prelude floating LNG (liquefied natural gas) and QGC business. This followed the cutting of its long-term oil and gas price outlook.
Shell acquired QGC, with its $54 billion takeover of BG Group in 2016. It produces gas in the northeastern state of Queensland and runs the Queensland Curtis LNG plant. It’s biggest contributor to Shell’s 35.6 million tonnes of LNG output in 2019.
QGC, which Shell acquired with its $54 billion takeover of BG Group in 2016, produces gas. It is in the northeastern state of Queensland and runs the Queensland Curtis LNG plant. This plant is the biggest contributor to Shell’s 35.6 million tonnes of LNG output in 2019.
Shell: Problems Plagued the Company
Shell Australia Chair Tony Nunan said, they look at their assets in Australia as an important part of their portfolio. He said his job is to make sure that they continue to add value to those assets. And they do that together with their partners, Nunan added.
He did not say how Shell’s restructuring plan might affect the Australian operations.
The company has been plagued by problems with the $17 billion Prelude FLNG (OL:FLNG) project. It is the world’s biggest floating vessel and one of just two floating LNG projects in the world.
Last year, commodity news had reported that Prelude shipped its first cargo more than two years behind schedule. But it has been shut for most of this year following electrical and other problems. Nunan did not say when Prelude might resume production.
Shell has also been hit by problems at the Gorgon LNG plant. This plant is located off Western Australia, where it owns a 25% stake.
The company is working closely with Gorgon’s operator Chevron Corp (N:CVX). This is on the staged shut down of the plant’s units to fix weld problems.
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