Shell LNG plans take shape

17 March 2006

The Royal Dutch/Shell Group is expected to issue tenders by the end of June for the contract to carry out maintenance work on existing liquefied natural gas (LNG) facilities at Marsa al-Brega, with an award expected by the end of the year.

The estimated Eur 150 million ($179 million) phase 1 contract, expected to be carried out over a period of three years, calls for a major overhaul of superstructure and facilities at the 700,000-tonne-a-year (t/y) plant. The successful bidder will also be expected to carry out preparatory work for a planned expansion of the plant. The phase 2 expansion of the facility, which would see capacity increased to about 3.2 million t/y, is dependent on the availability of gas feedstock.

Shell in 2005 signed a long-term partnership agreement with state-owned National Oil Corporation (NOC) under which it is to invest up to $637 million in exploration and the development of the country's LNG capacity. Under the agreement, Shell will invest at least $200 million in the exploration and development of five blocks in the Sirte basin with a total area of about 20,000 square kilometres. Seismic work, both 2D and 3D, is under way and drilling is set to begin in 2007 (MEED 6:5:06).

The agreement also calls for the joint development with NOC of a new LNG facility near the Marsa al-Brega plant. Shell submitted feasibility studies to NOC earlier in the year for the new facility, which will have LNG trains with capacity of 3 million-4 million t/y each.

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