Shell still in race for $5bn gas terminal

24 November 2007

The UK/Dutch Shell Group could yet win the race to develop Libya's first liquefied natural gas (LNG) terminal since 1970, according to a senior executive at state-owned National Oil Corporation (NOC).

Eni's recent announcement that it will develop plans for an LNG facility as part of the extension of its gas development activities is believed to have put the Italian company in pole position, despite Shell signing a similar agreement with NOC in 2005 (MEED 6:5:05).

But the Shell joint venture with state-owned Sirte Oil Company has completed site selection for the new plant, worth an estimated $3-5bn. Plans could be cemented as early as mid-2008, following Tripoli's completion of a gas allocation study.

“Site selection is complete for a plant at Ras Lanuf, 120 kilometres from the existing plant,” says Ahmed Aoun, project director of NOC. “Studies are complete, some front-end engineering work is under way and a soil investigation is now taking place. Eni is not necessarily ahead.”

Shell's agreement covers the rehabilitation of a 25,000-barrel-a-day (b/d) LNG plant at Marsa el-Brega, the $600m restoration of the plant's original 120,000-b/d capacity, and the development of a new facility. But the expansion and the plant are dependent on the availability of gas feedstock, which relies on the results of Tripoli's gas study, due for completion by mid-2008, and Shell's own exploration work.

Shell is exploring the Sirte basin for gas but NOC could also source gas from a third party.

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications