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Shell awards floating LNG contracts to Technip and Samsung

Shell Gas & Power Developments BV (Shell) today signed a master agreement with a consortium comprising Technip and Samsung for the design, construction and installation of multiple floating liquefied natural gas (FLNG) facilities over a period of up to fifteen years. Shell and Technip-Samsung also signed a contract for execution of the front end engineering and design (FEED) for Shell's 3.5 million tonne per annum (mtpa) FLNG solution.

Shell's FLNG solution has the potential to place gas liquefaction facilities directly over offshore gas fields, thereby precluding the need for long distance pipelines and extensive onshore infrastructure. This innovative alternative to traditional onshore LNG plants provides a commercially attractive and environmentally sensitive approach for monetisation of offshore gas fields.

The broad operating parameters of the Shell design mean it can be redeployed. Shell’s standardised “design one – build many” approach allows material repeatability gains to be captured during design and construction phases. After completing the FEED phase, Shell will examine key aspects of each potential FLNG project in its portfolio before considering a final investment decision.

The master agreement and the FEED contract were signed in Paris, France, by Jon Chadwick, Executive Vice President Upstream International, and Matthias Bichsel, Director Projects & Technology on behalf of Shell; Thierry Pilenko, Chairman and Chief Executive Officer, and Bernard di Tullio, Chief Operating Officer, on behalf of Technip; and J. W. Kim, Vice Chairman and CEO, and H. Y. Lee, Executive Vice President and Chief Marketing Officer, on behalf of Samsung Heavy Industries.

Matthias Bichsel commented: "Shell has a long history of technology firsts. The significant and positive progress we have made with our FLNG solution reinforces Shell’s position as a leading LNG technology developer.”

Jon Chadwick said: “Today marks a milestone in developing Shell’s generic FLNG solution. In partnership with various stakeholders, we are progressing several potential applications globally – gas fields for which Shell’s FLNG solution is the most viable approach.” 

Thierry Pilenko of Technip stated: “This project is a true representation of Technip's technological differentiation through the integration of all our core activities: LNG process, offshore facilities and subsea infrastructures. It gives us an opportunity to lead a powerful consortium with Samsung on the frontier areas of the gas business, creating value for Shell through innovation, technical excellence and delivery track record."

J. W. Kim of Samsung Heavy Industries stated: “Based on Samsung’s outstanding experience in LNG carriers and offshore projects, we are striving to expand our business to this new Floating LNG market. This large scale FLNG project awarded by Shell is an important milestone for us to launch into this new blue ocean. Samsung, together with its long standing and reliable partner, Technip, will create a distinctive success story in this challenging mega project.”

Notes to editor

- Shell’s invitation to tender was released in June 2008 and was issued to three consortia comprising international engineering and shipyard contractors, selected following an extensive pre-qualification exercise. Bids were received in January 2009.

- The FLNG concept's key dimensions are approximately 450 metres x 70 metres, with a 3.5 mtpa LNG capacity, plus associated LPG and condensate production; taking total liquid production potential to over 5 mtpa. Topsides weight is estimated in excess of 50,000 tonnes. Shell’s FLNG design is suitable for more distant offshore fields, designed to operate under harsh metocean conditions and process a wide range of gas compositions.

- An artistic impression of the Shell FLNG design is attached.

- Technip, leader of the winning consortium, is one of the largest firms in the fields of project management, engineering and construction for the oil and gas industry with 23,000 staff and offices in 46 countries.

- Samsung is one of the largest shipyards in Korea and amongst the largest in the world with a capacity to build 65 commercial ships and 250,000 tonnes of offshore topside modules each year.


For further information, please contact:

Catherine Aitken for Shell: +31 70 377 6254
Catherine.aitken@shell.com

Christophe Bélorgeot for Technip: +33 1 47 78 39 92
press@technip.com

Jason Kim for Samsung Heavy Industries: +82-2-3458-7382
Jinsam07.kim@samsung.com and copy to yongho.hyun@samsung.com


 

Cautionary note
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this announcement “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this announcement refer to companies in which Royal Dutch Shell either directly or indirectly has control, by having either a majority of the voting rights or the right to exercise a controlling influence. The companies in which Shell has significant influence but not control are referred to as “associated companies” or “associates” and companies in which Shell has joint control are referred to as “jointly controlled entities”. In this announcement, associates and jointly controlled entities are also referred to as “equity-accounted investments”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect (for example, through our 34% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.
 

This announcement contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘probably’’, ‘‘project’’, ‘‘will’’, ‘‘seek’’, ‘‘target’’, ‘‘risks’’, ‘‘goals’’, ‘‘should’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this announcement, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for the Group’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserve estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including potential litigation and regulatory effects arising from recategorisation of reserves; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this announcement are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended December 31, 2008 (available at www.shell.com/investor and www.sec.gov). These factors also should be considered by the reader. Each forward-looking statement speaks only as of the date of this announcement, 28 July 2009. Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this announcement.
 

The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this announcement that SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov. You can also obtain these forms from the SEC by calling 1-800-SEC-0330.

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