Business

Shell set to take over QCLNG, third train a possibility

ROYAL Dutch Shell looks set to take control of the QCLNG plant on Curtis Island, Gladstone, after agreeing to take over BG Group in a $90 billion deal.

The QCLNG plant, which began exporting LNG late last year, is a joint venture between BG Group and QGC.

Royal Dutch Shell previously had plans to build a fourth plant on Curtis Island via Arrow Energy, but shelved that proposal last year.

Commentators say the takeover deal is a huge vote of confidence in Queensland's $63 billion LNG export industry.

The deal is one of the energy sector's biggest, and the new company would be valued at about $387 billion.

Brisbane Times reports the two companies confirmed on Wednesday they would push ahead with one of the biggest energy deals in history, and redraw the Australian industry landscape in the process.

>> MORE GLADSTONE NEWS HERE

The deal is expected to deliver $US2.5 billion worth of synergies and a significant proportion of those will be in Australia.

Shell has a large portfolio of coal seam gas through its Arrow Energy joint venture with PetroChina.

The takeover could bring Arrow gas into QCLNG and potentially stoke a third train at the facility.

The ABC reports that if the transaction is approved by regulators and shareholders, the company's chief financial officer Simon Henry said Shell would become the biggest player in the global LNG market, with around twice the sales of its nearest competitors Exxon Mobil and Chevron.

MORE GLADSTONE LNG NEWS:

>> Watch: First LNG ship leaves Gladstone Harbour

>> Video: Second LNG flare lit as GLNG moves forward

>> BG Group boss visits QCLNG plant in Gladstone

"We will become the largest private LNG company in the world, and by a factor of two ... we'll have a leading position in the market for many years to come," he told a press conference in London.

Shell chief Ben van Beurden said the move would mean building a different type of company with a focus on deep water and integrated gas (LNG).

"I would expect us to be the leading LNG company and of course a significantly growing business, so it is only appropriate we pursue growth in this area," he said.

"BG will accelerate Shell's financial growth strategy, particularly in deep water and liquefied natural gas - two of Shell's growth priorities and areas where the company is already one of the industry leaders.

"The addition of BG's competitive natural gas positions makes strategic sense, ahead of the long-term growth in demand we see for this cleaner-burning fuel." 

The deal, if approved, will also see Shell overtake Chevron as Australia's largest LNG producer once the nation's seven projects are complete.

"The combination will add about 25 per cent to Shell's proved oil and gas reserves and 20 per cent to production, and provide Shell with enhanced positions in competitive new oil and gas projects, particularly in Australia LNG and Brazil deep water," the company said.

The proposal means it is likely that Arrow gas will find its way to the QCLNG project.
 

Topics:  bg group, curtis island, gladstone business, lng, qclng, resources, shell




Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

Dad jailed for giving a boy 'cones' of pot

HAUL: Eleven marijuana plants have been seized following a raid on a Pine Creek property. Photo: Zach Hogg / NewsMail

THE dad of three supplied the marijuana at his Gladstone home.

Boaties warned to keep clear of WICET construction site

Wiggin Ilsand Coal Exporting Terminal (WICET) welcomed it's first shiploader for stage one development in the Port of Gladstone on Wednesday September 24. Photo Contributed

Construction company Walz Group sets construction timeframe.

Calvin saved by another judge in The Voice battle rounds

Calvin Swart has made it into Team Jessie on The Voice.

He will continue on the competition but with a different judge.

Latest deals and offers

Own Sunshine Coast property? You’re about to make money

UP AND UP: Property owners are likely to win from rent and price increases but tenants and first home buyers might not be so happy. Photo: Brett Wortman / Sunshine Coast Daily

Good new for property owners, not so good for buyers and tenants.

Gladstone's 10 cheapest houses for sale

ALL of the houses are selling for well under $200,000.