Energy-hungry Asia will remain the major growth driver for Shell, though the region’s appetite may diminish slightly next year owing to global uncertainties, the Dutch oil and gas major’s chief executive officer, Peter Voser, said on Monday.
“I think Asia-Pacific for us is the key growth region. We see a lot of growth, and, hopefully, enough growth, that can actually drive the worldwide economy coming out of Asia-Pacific,” Voser said on the sidelines of the Singapore International Energy Week.
“That’s where huge parts of our investment actually go; into Asia or into upstream projects, for example, (from) where the gas finally will go to Asia,” he said.
Shell’s major projects in the region include the deep-water Gumusut field in Malaysia and the Shell Eastern Petrochemicals project in Singapore, the company’s largest petrochemicals investment globally. The company also has a presence in Brunei, China, Indonesia, the Philippines, Thailand, Vietnam and Australia.
And, while Shell will look to scale up operations within Asia to meet growing demand here, it will also invest elsewhere, including in state-of-the-art equipment, to ensure the supply-side is well bolstered.
“We have recently taken a final investment decision on new technology called ‘Floating LNG’, which will actually allow us to develop smaller gas fields off-shore, have a smaller footprint, and then deliver the LNG to the hungry Asian markets,” Voser said.
Earlier this year, Shell announced it would build the world’s first floating liquefied natural gas facility that can produce gas from offshore fields and liquefy it onboard by cooling, at an estimated cost of $11.5 billion. It is likely to be moored 200 km off the Australian coast on completion.
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“That’s a ship which we are building. It is 485 metres long, 70 metres wide and 600,000 tonnes heavy with a lot of technology from Shell in it. We are the first, and only one, to drive this. We look at this as one of the drivers for our growth aspiration in Asia-Pacific,” he said.
At the same time, Shell will continue to grow its LNG business in India, while also expanding its retail operations in the country. “I think India with its economy and population will be key in the growth of energy demand in the future... For Shell, India is a very important country. We are quite clearly focused on bringing gas into India,” he said.
Shell, in partnership with France’s Total, operates the 3.6-million tonnes per annum LNG terminal at Hazira, which consists of a storage and re-gasification terminal along with port facilities. “We are very pleased with the Hazira terminal that we have, which is our main entry into India and that capacity is used a lot,” he said, adding that the company would push for long-term LNG contracts.
The oil and gas major, which acquired a marketing licence in 2004 to set-up 2,000 fuel retail stations, also expects its retail arms to grow.
“As far as I know, we are still the only IOC (international oil company) with a marketing license and, therefore, we are growing our consumer business in India. The pace of that (growth) will depend on how fast we can acquire land, plots, etc. but also on how the overall energy policy of the Indian government will work. I think I have seen very positive signs in that direction,” he said.