By Emily Chow
PERTH, Australia (Reuters) – Shell hopes its Australian supply of liquefied natural gas (LNG) will help meet demand from emerging markets in South and Southeast Asia, which are expected to absorb some of the recovery in global supply later this year. decade.
Asian spot LNG prices rose last week to the highest levels since January as warm weather across the region spurred demand for the super-cooled fuel.
“This combination of decarbonization and declining domestic production (will drive LNG demand growth),” Cecile Wake, president of Shell Australia, told Reuters on the sidelines of the Australian Energy Producers Conference on Wednesday.
Wake expects the Philippines, Thailand, Vietnam and Bangladesh to be key markets for demand growth.
“I think we describe it as latent demand in South and Southeast Asia,” Wake said, adding that global LNG markets were “perfectly balanced” this year.
Wake said Shell’s internal assessment of demand prospects in Asia was the reason it was deeply committed to the Australian market.
“We see ourselves as being competitively positioned in Asian markets. It’s about maintaining that supply position, ensuring we have high utilization and high reliability of our LNG assets here,” she said.
Wake said Shell was pleased with how its flagship floating LNG facility, Prelude, emerged from its legal closure in Australia.
The Prelude, whose deck is longer than four football fields, was the world’s first floating LNG facility, estimated to cost more than $12 billion. It has suffered a series of outages since it began production in June 2019, including a fire that led to a complete loss of power in December 2021.
“It is clear that this year’s volumes will be higher than last year because there is no legal turnaround. It came out of this legal shutdown with greater reliability and a much tighter range of where we think the performance range is. “Wake said.
“There are no major legal shutdowns this year or next. The next major shutdown will not occur until 2026 at this stage,” she said.
(Writing by Sudarshan Varadhan; Editing by Mark Potter)
