[
attachment=495]BIH (
http://www.bihl.com/) - the only known support industry player under Boustead Singapore, listed on SGX that will potentially benefit from the on going boom in global LNG industry especially those in North America:
Please correct me if I am wrong.
Vested
GG
http://aap.newscentre.com.au/acf/130503/...95281.html
Why Shell has its foot on the gas
LNG It's the world's fastest growing fuel and business wants to capitalise, writes Stanley Reed. A s Big Oil increasingly becomes Big Gas, no major petroleum player may have more at stake in the shift than Royal Dutch Shell. More than any of its rivals, Royal Dutch Shell is betting its future on the business of bringing natural gas from remote locations like Qatar to energy-hungry destinations like China and Japan.
Many experts say Shell may eventually show big benefits from its natural gas emphasis.
Increasingly, to make gas a global commodity, companies supercool it into a liquid form for transport on specialised ships. Shell has already invested about $US40 billion in liquefied natural gas production plants, storage terminals and related systems, and it plans to continue pumping money into that business.
Shell now has about 7 per cent of the world LNG business, with ambitions to more than double that share through new projects and acquisitions. Last year, LNG and related businesses earned Shell $US9.4 billion of its $US25.1 billion in profit.
"We are in the lead, and we want to stay in the lead," Andrew Brown, Shell's head of international exploration and production, said in a mid-April interview.
Brown said Shell expected global demand for LNG to grow rapidly in the coming years, doubling by 2025 to about 500 million tons a year, the equivalent of about 4.5 billion bar- rels of oil,making it by far the fastest growing fuel. The main reason for the anticipated growth is that natural gas is abundant. And because of the US shale gas boom, it has become relatively cheap especially in North America, where prices lately have been in the range of $US4 per million British thermal units, compared with highs of $US13 as recently as 2005.
The European spot price is around $US10 per million BTUs, and the Asian price around $US15; contract prices, often linked to oil, may be higher.
And because it burns much cleaner than either coal or oil, it will very likely stay in favour because its use can help lower the greenhouse gas emissions that are blamed for causing global warming. To Brown's frustration, not everyone gets the message.
That is one reason Shell's big LNG bet is no sure thing. The United States has wholeheartedly embraced gas.
But Europe, mired in economic doldrums, has turned to coal, which is less expensive. This has driven down demand for gas in the region, which in recent decades had been one of the world's biggest markets for natural gas via pipelines and LNG.
Europe did not have "the right balance" in terms of promoting gas, Brown says. About 75 per cent of Shell's LNG goes to Asia.
To build on its lead, Shell agreed in February to buy the LNG business of the Spanish company Repsol for about $US6.7 billion.
Some industry analysts considered the price toohigh.But,Repsol says, Shell had to outbid more than a dozen competing offers. Over the longer run, being a big player in LNG is likely to help Shell out-earn its peers, predicts Martijn Rats, an analyst at Morgan Stanley in London. The huge upfront invest- ments of several billion dollars per gas liquefaction plant might seem prohibitive, Rats says, but those projects "generate large amounts of operating cash flow over two or three decades".
While LNG projects may not have as high potential returns as some oil fields, it is less risky to build giant gas installations because much of the out put is sold in advance and the plants require relatively little capital expenditure once up and running.
The steady cash from LNG, which at current prices produces profit margins of 10 per cent to 15 per cent, can be used to finance riskier activities. One risk for Shell is that an anticipated export surge from North America leads to a plunge in the much higher prices for gas in Europe and Asia.
"Assuming that there are large volumes of LNG exports from North America, the price differences between US and Asia and especially US and European gas are likely to be substantially reduced," says Christopher Goncalves, an analyst at the Berkeley Research Group in Washington. But Goncalves says the differences would probably not disappear, because shipping and liquefaction added several dollars to the cost of LNG.
Shell is trying to further stoke demand for LNG by making it easier to use the chilled gas as a transportation fuel.
In Europe, the company recently chartered two LNG-powered tanker barges to ply the busy Rhine waterway. It appears to be a first step in trying to persuade shippers to shift to LNG-powered craft to transport diesel fuel or gasoline. According to the barges' maker, Peters Shipyards in the Netherlands, they emit 25percentlesscarbondioxidethantheiroilpowered counterparts, while running much quieter.
Europe is tightening regulations on emissions from shipping, particularly in inland waterways, Rats says, and LNG-powered ships are an economically sound means of complying.
Last year Shell bought a Norwegian company, Gasnor, that supplies LNG fuel to ships. Shell is also building operations to provide fuel for LNG-powered trucks along a route in western Canada and has plans to do the same in the US.
So far the use of LNG in transportation is negligible: about 16 million cars and trucks are powered by gas, which is just 1.5 per cent of the world's road vehicles. Morgan Stanley calculates that the gas now used by these cars and trucks replaces about 1.2 million barrels per day of oil products.
Under optimistic forecasts, that use in 10 years could rise to 5.6 million barrels a day, or around 7 per cent of 2012 oil supplies.
Meanwhile, Shell is trying to lower the capital cost of LNG to make it feasible in even more remote offshore locations, by building liquefaction plants on what amount to enormous barges, bigger than aircraft carriers. The first such vessel destined for an offshore field in Western Australia is being built in a South Korean shipyard, where Brown says it can be done "cost effectively" compared with Australia, where labour and other costs have recently risen sharply. Shell wants to come up with a standard design for these floating LNG plants and gradually introduce them around the world.
A candidate for one of the vessels is a field called Abadi in Indonesia, in which Shell has a 30 per cent stake.
This week Shell and Woodside, an Australian company in which it owns a 24 percent stake, agreed to work on a floating LNG plant for Woodside's estimated $45 billion Browse offshore gas project in Australia. And where is the LNG-liquefaction building boom likely to be after Qatar and Australia? North America, Brown says.
NEWYORK TIMES The LNG-powered barges emit 25 per cent less carbon dioxide than their oil-powered counterparts, while running much quieter.
Headline: Why Shell has its foot on the gas
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