Shell looks at آ‘swapآ’ options for first LNG to India

Vol 8, PW 22 (09 Feb 05) Midstream & Downstream

Shell is examining several swap options to lower the shipping cost of its first cargo of LNG from the North West Shelf in Australia to Hazira.

The cost of shipping LNG from Australia is lower than from the Middle East, reveals a source. Shell is looking to bring in a cargo of LNG from somewhere nearer India.

Shell confirms to this report that a first cargo is indeed likely to arrive in March and will be used to ready the terminal ahead of formal commissioning. Adds an expert: Shell will need to waste a shipload of LNG to test the terminal.

It will need to cool down the line pipes and the storage tanks to bring the temperature down to minus 160 degrees. Only then can the terminal be commissioned and start business.

Shell has identified its first full LNG cargo of 138,000 cubic metres from the North West Shelf in Australia where it is one of six partners with a 16.7% stake. However, a swap arrangement with, for instance, Oman LNG, where Shell also holds equity, would mean the LNG from Australia might not necessarily be the one destined for Hazira, explaining Shells vague confirmation that: Australia is indeed a possible source.

Shell is determined to make sure it gets the shipping element right. Has it chosen a vessel to ship the LNG to Hazira This is not firmed up yet, we learn.

Shell will find a good ship, with a highly experienced crew, especially for this first cargo into this brand new port. He adds: Shell and Total do not compromise when it comes to secure safe operation.

No date has been announced for the formal start of commercial operations and Shell confirms only that: Commercial cargoes will arrive when commissioning is complete. Shell originally wanted to import first LNG to Hazira late last year but technical problems with the second storage tank forced a delay to March this year.

The problem with the second tank is solved, reveals Shell. This tank will be ready for use a little after the first tank.