Royal Dutch Shell Plc, Europe’s largest oil company, has earmarked more than $20 billion to spend on natural gas projects through 2015 as profit from extracting, processing and selling the fuel soars.
“Our integrated-gas earnings have more than trebled in the last five years, reaching $9 billion over the last year,” Chief Executive Officer Peter Voser said Sunday. “We see growth opportunities to invest over $20 billion here for 2012-15.”
Shell and its peers have expanded global gas operations as demand for the fuel rises in Asia. Revenue from the liquefied natural gas (LNG) business, pushed higher by increased shipments following Japan’s Fukushima atomic crisis last year, drove a 2.3 percent gain in third-quarter profit at The Hague-based Shell.
The company expects LNG output to increase 30 percent to about 29 million metric tons a year once it completes projects in Australia, Shell said in a statement. It also plans to power trucks and ships with the liquefied fuel and is assessing ventures that would use as much as 5 million tons a year.
Shell, which has announced $6 billion in acquisitions this year, has forecast cash flow from operations will rise 50 percent through 2015, driven by new projects in Qatar, where it runs a gas-to-liquids plant, and Canada.
“Shell is continuing to generate substantial cash flows,” said Stuart Joyner, an analyst at Investec Securities Ltd. in London.
Shell said last week it’s in talks with Anadarko Petroleum Corp., Eni SpA and others to join gas projects off Mozambique, after this year losing a bidding war with Thailand’s PTT Exploration & Production Pcl for Anadarko’s partner Cove Energy Plc. The nation may become the third-largest LNG producer, after Australia and Qatar, in as few as 10 years, Anadarko has said.
“We are taking our time, because we are also quite busy elsewhere in the world,” Maarten Wetselaar, executive vice president of Shell Upstream International, said in an interview. “We’re not short of opportunities, but it’s certainly something we would like to be involved in.”
Mozambique may hold as much as 250 trillion cubic feet of gas, national oil company Empresa Nacional de Hidrocarbonetos estimated last month after energy explorers made the decade’s biggest discoveries in its waters.
Shell, the largest LNG supplier, has also been examining plans to add more than 20 million tons of annual LNG capacity in Australia, Indonesia and North America as it predicts a fourfold increase in demand to 400 million tons a year by 2020 from 2000.