Shell has announced plans to accelerate the use of liquefied natural gas (LNG) fuel in transport, taking a final investment decision on two small-scale liquefaction units. These two units will form the basis of two new LNG transport corridors in the Great Lakes and Gulf Coast regions.
"This decision follows an investment decision in 2011 on a similar corridor in Alberta, Canada. Shell is also working to use natural gas as a fuel in its own operations," said the company in a statement. Shell plans to install a small-scale liquefaction unit with a capacity of 125,000 tons per annum at its Shell Geismar Chemicals facility in Geismar, Louisiana. The unit will supply LNG along the Mississippi River, the Intra-Coastal Waterway and to the offshore Gulf of Mexico and the onshore oil and gas exploration areas of Texas and Louisiana.
Shell is also expanding its existing relationship with fuels and lubricants re-seller Martin Energy Services, a wholly-owned subsidiary of Martin Resource Management Corporation (MRMC). MRMC and its affiliate, Martin Midstream Partners, will provide terminalling, storage, transportation and distribution of LNG.
In the Great Lakes Corridor, Shell plans to install a liquefaction unit with the same capacityat its Shell Sarnia Manufacturing Centre in Sarnia, Ontario, Canada. Once operational, this project will supply LNG fuel to all five Great Lakes, their bordering U.S. states and Canadian provinces and the St. Lawrence Seaway.
The two plants are expected to begin operations and production in roughly three years, depending on final regulatory approval. “We are investing now in the infrastructure that will allow us to bring this innovative and cost-competitive fuel to our customers," said Marvin Odum, President of Shell Oil Company. “Natural gas is an abundant and cleaner-burning energy source in North America, and Shell is leveraging its LNG expertise and integrated strength to make LNG a viable fuel option for the commercial market.”
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