Kai Ryssdal: Royal Dutch Shell’s claim to fame today comes on the high seas: the biggest floating thing ever. The oil and gas giant says it going to build a natural gas plant more than 100 miles of the coast of Australia. High-tech, waterproof and built for one reason — what’s expected to be exploding demand in Asia.
From the Marketplace Sustainability Desk, Scott Tong reports.
Scott Tong: Computers and phones have gone cordless. So why not big energy factories?
Shell’s floating natural gas plant announced today needs no pipeline. It’ll drill for natural gas, and then liquify it so gas can be shipped straight to market. And the contraption — which makes its maiden voyage in 2016 — will be small, says the company’s Neil Gilmour.
Neil Gilmour: We’ve got about 25 percent of the footprint that we normally have onshore, so we have been packing a grandfather clock, if you’d like, into a Swiss watch.
Now it’ll still be a monstrosity; think five football fields off Western Australia — lots of girth off Perth. If it works, though, suddenly it’ll be possible to drill for gas anywhere offshore.
Gilmour: There’s a lot of gas in Australia, in places like Indonesia, the South China Seas, which is currently very difficult and impossible to access economically.
What’s easy is to see Asian demand. Japanese sushi bars need electricity, and Japan’s hunting for new fuels after its nuclear disaster. Industrial China’s use of natural gas may jump sixfold the next two decades.
Biliana Pehlivanova is an analyst at Barclays Capital.
Biliana Pehlivanova: And we have new countries joining the club of Asian importers.
Like Thailand, Malaysia, Singapore.
Certainly there are questions: Will the technology work? Will natural gas prices stay high enough? Still, the big energy companies are increasingly betting on gas. Michael Rieke at Platts LNG Daily says an added benefit is a low carbon footprint.
Michael Rieke: Although natural gas does contribute greenhouse gases to the air, it doesn’t produce as much as oil, gasoline, coal, competing fuels.
So Shell’s new facility will be a floating hedge against future climate policy, too.
In Washington, I’m Scott Tong for Marketplace.
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