Shell to invest $20bn in gas

With profits from extracting, processing and selling fuels soaring, Shell is planning to invest more than $20bn on natural-gas projects until 2015.

Asia's general demand for Liquified Natural Gas (LNG), combined with Japan's Fukushima atomic crisis last year leading to increased shipments, Shell  has expanded its global gas operations and seen earnings more than treble in the last five years.

A 2.3% gain in Q3 profits is evidence of the success of Shell's expanded global gas operations. Completion of projects in Australia is expected to boost LNG output by 30%  to around 29 million metric tons annuall.

Looking ahead, the company plans to power trucks and ships with LNG and is also considering other projects which could deliver as much as 5 million tons of gas use annually. As the world's largest supplier, Shell has already agreed to provide LNG for heavy-duty trucks and recently announced a deal with Bison Transport to provide LNG for trucks on the 900 mile Canadian highway running from Alberta to the Pacific coast.

The success of new projects in Qatar and Canada, along with $6 billion in acquisitions this year, has led to a positive cash flow forecast for Shell of 50% through to 2015. Gas projects in Mozambique are also in Shell's sights, with other potential growth areas including Australia - as part of a $50 billion investment plan - Indonesia and North America. The output is needed to meet the predicted fourfold increases in demand to 400 million tons a year by 2020 from 2000.

Shell hopes to use output from Australia's northwest coast to supply the Asia Pacific region, by liquefying the gas using a floating production vessel.  A decline in North America's gas prices may also lead the company to replicate its Qatari gas-to-liquids plant  in Texas or Louisiana.