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Liquefied natural gas (LNG)

Shell holds the largest equity share of LNG capacity amongst international oil companies (IOCs) and holds a leading position in the world's key natural gas markets of Europe, US and Asia-Pacific. As a pioneer of the industry, we have set the pace in developing LNG technology and establishing the safety of LNG operations and shipping standards used throughout the industry.

We have over 40 years experience producing and shipping LNG from Australia, Brunei, Oman, Malaysia and Nigeria, to key markets such as Japan, Europe and fast growing regions. To meet this demand, Shell has equity in LNG supply projects - either in operation or under construction – in seven countries. All of these operations are joint ventures with governments or local and international partners.

One of these is the Sakhalin II project, the largest infrastructure project in Russia which involves crude oil, natural gas and LNG production and export. The project is well positioned as a LNG supply source for growing markets in the Asia Pacific region including Japan.

Most of the LNG imported into Japan is used as fuel for power generation or raw material for city gas. However, a new initiative of using LNG in the transportation sector has started from the viewpoints of economic attractiveness, environmental merits such as reduction of exhaust gas emission, and/or as an alternative fuel to replace diesel in Europe, North America and China.

The use of LNG not only for buses and trucks, but also for ships, construction machinery and diesel propulsion trains is also being considered. In Japan, a study to use LNG for long distance trucks, particularly from the viewpoint of CO2 reduction, has started.

New applications for Gas-to-Liquids (GTL)

In 1993, Shell constructed the world’s first commercial GTL plant in Malaysia and started to market the product primarily to niche markets. GTL is being imported into Japan for use as cleaning solvents and alternative fuel for oil heaters. Pearl GTL in Qatar, which is ten times the size of the plant in Malaysia, commenced operations in 2011, and the construction of other new GTL plants is now under consideration. Due to the increasing production capacity, new applications of GTL in general-purpose product markets are being considered. In Japan, these include alternative fuel for diesel buses and agricultural applications.

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