SINGAPORE: Royal Dutch Shell, BG Group and Total are among companies that may gain from liquefied natural gas sales as prices of the cleaner-burning fuel climb because of rising demand, a report said.
Demand will outpace supply by more than two times until 2015 because of delayed construction of processing plants, Bernstein Energy said in a report yesterday.
Shell, Total, Exxon Mobil Corp and BP “hold the greatest equity stakes in gas supply and LNG production developments,” analysts Neil McMahon, Ben Dell and Oswald Clint wrote in the report.
Prices of LNG have tripled in the last five years to a record $10 a million British thermal units because of a shortage of equipment and contractors and surging costs.
Just four projects, including Hunt Oil Co-led venture in Peru and Chevron Corp-led plant in Angola, have been approved since the start of 2006.
“Integrated companies with large existing LNG liquefaction positions should continue to benefit from pricing strength,” the analysts said in the report. LNG demand in Asia, which accounted for 34.3% of global consumption last year, is rising, according to the report.
Companies spent about $153bn in LNG ventures globally between 1960 and 2007, the analysts said. Producers may spend about $300bn in new LNG projects in the next eight years, almost twice the amount invested since 1960.
“Lead times on LNG plants have increased from 24-30 months pre-2005, to greater than 36 months today, highlighting the pressures on timely completion,” the report said.
Two other projects that received investment approval since 2006 are Woodside Petroleum Ltd’s Pluto venture in Australia and Mitsubishi Corp’s project in Indonesia. – Bloomberg |
