Entering the market: Shell to take part in bids for LNG import

Dismisses talk that company is going to sell its downstream business.

ISLAMABAD:

Shell Pakistan has expressed interest in assisting Pakistan in the import of liquefied natural gas (LNG) and has dismissed talk that the company is winding up its downstream business.

“We have no plan to sell downstream business and shares in Pakistan Refinery Limited,” Shell Pakistan Managing Director Omar Sheikh told The Express Tribune in reply to a question on Wednesday.

Rumours had been doing the rounds for quite some time in the oil industry that Royal Dutch Shell, the parent of Shell Pakistan, was going to wind up its downstream business here like US-based Chevron did.

Speaking to the media about a survey commissioned by Shell Pakistan along with Wim Thomas, Chief Energy Adviser for Royal Dutch Shell, Sheikh said they were also looking at drilling offshore wells, but it depended on the environment in Pakistan.

Shell had drilled an offshore well in 2005, but it dried out. “Technology has improved since and we are again looking at it,” he said.

Saying that the government was going to award Engro a contract for setting up an LNG terminal, he stressed that Shell had been trading LNG and could help the country bring gas. “We hope that the government will invite tenders for LNG supply and we will participate in a transparent way.”

However, he cautioned that Pakistan was going to enter into LNG business at a time when its prices were at higher levels. LNG prices were indexed to crude oil and they could come down if they were not fixed, he said.

Sheikh said Shell was not in the core business of coal, but was involved in coal gasification projects. “Thar coal reserves have not been developed so far and investment in coal depends on economics of such projects.”

Survey findings

In the survey, nine out of 10 Pakistanis surveyed described the cost of energy as the most important issue for them while eight out of 10 considered it critical to have access to adequate energy supplies in the future. Complete survey results were unveiled on the occasion.

“Energy is Pakistan’s primary issue today and at Shell it is important for us to understand what an average Pakistani thinks about the current energy challenges and future solutions. This was why we were so keen to commission this research,” said Sheikh.

A total of 2,020 people were surveyed across six major cities and five rural centres to assess their views on the country’s future pertaining to energy and what their priorities were in this context. The survey was designed and conducted between September and October 2013.

Another highlight of the survey was that in the context of an energy-constrained world, nine out of 10 Pakistanis considered higher unemployment and high energy prices as factors that would have the largest impact on the country, followed closely by energy and food shortages.

At the event, Wim Thomas also presented a recent research publication of Shell titled “New Lens Scenarios”. Shell has been developing scenarios to explore the future and deepen its strategic thinking for 40 years in an effort to help people and policymakers anticipate the future to make better decisions.

This research goes beyond traditional energy outlooks by covering a broader set of drivers and trends in economics, geopolitics, social change and environmental stresses on water and climate. It looks further ahead than comparable analyses – mainly to 2060 for the energy system and also to 2100 for climate implications and renewable energy developments.

“Rich nations should put money and collaborate efforts to provide technologies to under-developed countries to address climate issues,” Thomas suggested and said political, economic and societal choices would be the key to developing available sources and technology for clean energy.

Published in The Express Tribune, March 6^th, 2014.

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