Shell with a new Project: LNG to Power Vessels and Trucks on Cheap U.S. Gas

By Finance

Royal Dutch Shell Plc (RDSA) is enlarging plans to make LNG a fuel for vessels and trucks as biggest energy producer in Europe that looks to profit from the cheapness of US gas compared to oil.
The Shell Company, where gas production overtook oil for the 1st time this year, is going to increase the liquefied natural gas for-transport projects to more than five million tons a year, informed Simon Henry, Shell Chief Financial Officer. This is equal to about 120 000 barrels of oil a day, or 4% of the global production of the company in the 3rd quarter. Shell is going to offer about half the volume to the trucking industry in Canada and the USA and the rest of the fuel to shipping in the Great Lakes, Gulf of Mexico and the Baltic Sea.
“This is a very global opportunity,” Peter Voser, Chief Executive Officer stated last month in New York. “The current gas equivalent price for one kilometer is double-digit percentage lower than for diesel in the USA”
Gas prices in the USA dove to a decade low this year after firms ramped up output from shale deposits to make the nation the largest producer in the world. Today, the price of US crude oil is 4 times more than LNG on a per barrel basis, allowing Shell to profit from LNG transport plans even after the expenses of turning gas into a liquid.
“Because the price of the equipment, the engines and the liquefaction and distribution is quickly coming down, we do see better chances than we have actually thought originally,” Henry stated. “The world is refining long, but diesel short by and large because the refining complex of the world is producing too much gasoline and not enough diesel,” creating a chance for liquefied natural gas to power vehicles.
Green Corridor
The Shell Company is now working on the Green Corridor project with Flying J Inc. to provide 250,000 tons of liquefied natural gas a year to trucks between the 900 mile (1,600 kilometer) highway from Alberta to the Pacific coast in Canada. It’s also developing a project to supply LNG fuel to the shipping sector with the help of its Norwegian distributor Gasnor and the Gate LNG terminal situated in Rotterdam, Voser also added.