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Shell’s stake in QCLNG
was acquired through
the company’s merger
with BG Group in
2016.

Shell reportedly weighs

sale of stake in QCLNG

INVESTMENT ROYAL Dutch Shell is reportedly considering Project. Some of the gas produced under the
selling a stake in the common facilities at its project, which is due to enter service in 2021, will
Queensland Curtis LNG (QCLNG) plant in be exported through QCLNG, while the rest will
Queensland, Australia. The report is based on a be sold on the domestic market. Construction
sale flyer that was seen by Reuters, which said of more than 600 CBM wells that are part of the
Shell was considering selling a 26.25% interest Surat Gas Project will begin this year.
in the facilities. The document reportedly shows The decision to sanction the project came
that the sale process is being handled by Roth- as other gas operators were pushing back final
schild & Co. and is due to be completed this year. investment decisions (FIDs) in Australia in
Shell told the news service it would not response to the oil price collapse and the coro- Coal-bed
comment, describing the story as market spec- navirus (COVID-19) pandemic. Indeed, Shell
ulation. Rothschild also declined to comment, announced a delay to the FID on the Crux pro- methane (CBM)
Reuters added. ject, which had initially been planned for 2020.
However, sources familiar with the process Production from Crux will be used to back- from the Surat
told Reuters that the stake could fetch $2-3bn. fill the Prelude floating LNG (FLNG) project
The common facilities at the plant are wholly offshore north-west Australia. Basin is used as
owned by Shell and include two LNG storage “This is consistent with Shell’s global feedstock gas for
tanks, water, fuel and power generation systems, approach of actively managing all operational
a tanker-loading jetty and terminals. China and financial levers, including reducing capital QCLNG.
National Offshore Oil Corp. (CNOOC) owns spend,” a Shell spokeswoman told Reuters at the
a 50% stake in the first of the two liquefaction time.
trains at QCLNG, while Tokyo Gas has a 2.5% Separately, Shell pulled out of the proposed
interest in Train 2. Lake Charles LNG project on the US Gulf Coast
The common facilities receive a US dollar-de- in late March. Shell had inherited its 50% stake in
nominated, inflation-linked usage fee from Lake Charles LNG through its merger with BG
CNOOC and Tokyo Gas regardless of the plant’s Group in 2016. It was also through this merger
throughput over a period of about 15 years. that Shell acquired QCLNG.
Coal-bed methane (CBM) from the Surat This year’s market downturn appears to have
Basin is used as feedstock gas for QCLNG. In encouraged Shell to streamline its LNG portfo-
April, Arrow Energy – a joint venture between lio. That companies are selling non-core assets
Shell and PetroChina – sanctioned the first during this time is not surprising. However, it is
phase of the AUD10bn ($6.9bn) Surat Gas possible that buyers would be more hesitant.™

P16 www. NEWSBASE .com Week 22 05•June•2020