Author: Markus Hector, General Manager, Market Development, Shell LNG Marketing and Trading

Computer generated image of the LNG plant as it would look from the air

Difficult times

We are living in a crisis of uncertainty. In just a few months, we have seen the world go into lockdown mode in the face of an historic pandemic, causing serious impact to the global economy and upturning each of our lives. And as Bahamians know too well, this has happened less than a year since Hurricane Dorian, the Bahamas’ worst natural disaster ever, destroyed the beautiful islands of Abaco and Grand Bahama.

In times like these we face many obstacles, which we never imagined just a few months ago. But we need to make the best of it and use this as an opportunity to reflect on our priorities.

Shared Vision

At Shell, we believe our priorities are closely aligned with those of The Bahamas. Our shared vision includes providing reliable, affordable, cleaner and sustainable electricity to the residents and businesses on the island of New Providence. This will play an important role in the Government’s endeavors to modernize the energy sector, which is critical for national economic development. Looking at the challenges and opportunities in a post-Covid world, our power project may now be of even greater importance.

As a global energy company, Shell is using technology and innovation to help build a sustainable energy future. Shell’s purpose is to power progress together by providing more and cleaner energy solutions to the world. Our natural gas-to-power project in The Bahamas fits within this strategy as a transformative investment in the island’s energy infrastructure. Our ability to invest in the construction of an affordable liquefied natural gas (LNG) terminal, and our purchase of the new power plants, remains dependent on the timely closure of current negotiations with BPL and the Government.

Watch these videos about LNG

Shell LNG

Title:  Shell Natural Gas LNG Video

Duration: 0:34 seconds

Description: 

A short video animation about Shell LNG

LNG Transcript

[Background music plays]

Bright, uplifting orchestral music

[Video footage]

Small blue gas bubbles float around on screen. They begin to turn white as snowflake icons appear and grow. The white bubbles then morph into small liquid drop icons.

[Text displays]

Liquefied natural gas, or LNG, is formed when natural gas is cooled to –162°C (–260°F).

[Video footage]

Text and snowflakes fade out leaving droplet icons on screen.

[Text displays]

This shrinks the gas’s volume 600 times

[Video footage]

Liquid icons move closer together and shrink on screen.

[Text displays]

making it easier and safer to store and ship

[Video footage]

Ship icon with four big tanks appears on screen as the droplets multiply into four groups and move down into the corresponding tanks. Liquid droplets are now shown contained within transparent tanks on board large ship. The tanks then turn to solid white so the droplets are no longer visible.

[Video footage]

The ship then fades out leaving one group of liquid droplets behind which grow to fill the center of the screen.

[Text displays]

When LNG reaches its destination, it is turned back into a gas at regasification plants.

[Video footage]

The liquid drops suddenly turn back into round gas bubbles which float around before a container animates onto screen containing the bubbles within.

[Video footage]

Text fades out and container moves to the left of screen.

[Video footage]

A thin pipeline animates out of the container and stretches across the width of the screen. A cityscape appears above the pipeline and a bubble of gas travels down the pipeline from the container into the cityscape. As the gas bubble passes through the city the building lights turn on.

[Text displays]

It is piped to homes, businesses and industries where it is burnt for heat or to generate electricity.

[Video footage]

The container and cityscape scene begins to slide off screen to the left as a truck appears and drives out of the cityscape to the right.

[Text displays]

LNG is also emerging as a cost-competitive and cleaner fuel for shipping and heavy-duty road transport.

[Video footage]

The truck stops in position and a ship icon fade onto screen next to the truck.

[Video footage]

Scene fades out and Shell Pecten/logo fades up.

[Background music plays]

Shell mnemonic plays

Shell LNG - Cleaner Air

Title:  Shell Natural Gas Cleaner Air Video

Duration: 0:30 seconds

Description: 

A short video animation about how natural gas contributes towards cleaner air

Cleaner Air Transcript

[Background music plays]

Bright, uplifting orchestral music

[Video footage]

A large white circle starts on the screen with a blue gas flame icon within it.

[Text displays]

Natural gas has a vital role in the global energy system.

Gas flame icon fades out

[Video footage]

A partial cityscape fades up onto the screen.

[Text displays]

By 2050, around two-thirds of the world’s population are expected to live in cities, up from around half today.

[Video footage]

More buildings fade up to complete the cityscape

[Text Displays]

Air pollution affects the health of millions of people around the world.

[Video footage]

As the words appear on screen grey pollution clouds appear above the cityscape and move slowly from side to side.

Text fades out

[Text displays]

Natural gas emits around one-fifth the pollutants generated by coal when burned for electricity

[Video footage]

As the words appear, yellow lights begin to turn on in the cityscape buildings, and most of the grey pollution clouds disappear leaving only a few light grey clouds floating above the buildings.

[Video footage]

The whole cityscape scene, with lights and clouds, begins to slide off screen to the left as a truck appears and drives out of the cityscape to the right.

[Text displays]

and offers cleaner burning alternatives for city trucks, busses and boats.

[Video footage]

The truck stops in position and a bus and ship icon fade onto screen next to the truck.

[Video footage]

All screen elements fade out and the Shell Pecten/logo fades up.

[Background music plays]

Shell mnemonic plays

More and cleaner energy

Integrated Gas MP4

[Voice Over]

Shell is working to provide more and cleaner energy. Natural gas is the cleanest-burning hydrocarbon.

[Animated Sequence]

A city skyline fills the screen and CGI lines move across the screen to “indicate” the supply and distribution of natural gas for the costumer. The lines stream to the centre of the image.

Text appears over the image to highlight the LNG carrier route.

Text on screen:

More and cleaner energy

LNG carriers travel overseas

[Voice Over]

Every day we load around two cargoes of liquefied natural gas.

 

[Animated Sequence]

An LNG ship sits in open water which is overlaid with a grid. Background facts about the shipping in text with lines towards the ship.

Facts in animation:

~ 2 Shell LNG cargoes a day

Manage or time charter 100 LNG vessels

~ 20% of the global LNG fleet

[Voice Over]

With supply from 17 countries for customers in 25 countries.

[Animated Sequence]

A still image of planet earth slowly moves within the screen while images of carriers appear over different countries to depict the text that appears on screen.

Text on screen:

Shell LNG supply from 17 countries

For customers in 25 countries

[Voice Over]

We’re growing an LNG network for ships and trucks, making it easier for fleet customers to make the switch.

[Animated Sequence]

A still image appears of 4 trucks on a highway while text appears on the trucks and within the image. Icons appear to show a carrier and a truck and a switch.

 

Text on screen:

Growing

LNG network

Fleet customers

[Voice Over]

We run the world’s largest gas-to-liquids plant in Qatar, producing high-quality products for everyday life.

[Animated Sequence]

A still image of a gas-liquid-plant fills the screen while text and animation appears on screen to visualise the plant’s production.

 

Text on screen:

World’s largest

Gas-to-liquids plant in Qatar

 

 

[Voice Over]

We are celebrating 25 years of our Bintulu GTL plant in Malaysia…

[Animated Sequence]

Two plant operatives are stood in front of pipework. Animated lines flow throw the pipelines in the while text appears on screen and an animated graphic of the globe zooms into Malaysia where a gas-to-liquid plant icon appears.

Text on screen:

Celebrating 25 years Bintulu GTL plant

[Voice Over]

..where 98% of staff are nationals.

[Animated Sequence]

An image shows two staff members in a laboratory. Text and animated graphics appear on screen. A pie chart represents 98% of staff as being nationals next to a flag of Malaysia and the background of the image is filled with slow moving animated molecules.

Text on screen:

98% staff nationals

[Voice Over]

We’re growing our power business to meet the world’s changing energy needs.

[Animated Sequence]

An image of a cityscape at night lit slowly zooms out. Roads are filled with streaks of light to depict vehicle motion in a fast moving city.

Words move across this image relating power use within a city infrastructure.

Text on screen:

Natural gas

Energy use

Renewable electricity

Increasing power needs

[Voice Over]

As demand rises and emissions must fall,

[Animated Sequence]

An image of wind turbines slowly pans through the screen. In the background an animated circle around one of the turbines blades depicts rotary movement.

Text and icons appear around the turbine at the forefront of the screen.

Text on screen:

Each technician climbs ~ 25,000 meters a year

Blades stretch ~ 80m

[Voice Over]

natural gas plays a role in supporting the integration of variable renewable electricity generation.

[Animated Sequence]

An image of solar panels fills the screen with animated lines of dots showing the energy feed from the direction of the sky down to the solar panels.

Words appear on screen labeling a different areas of the complete solar panel.

Text on screen:

Solar panel

Solar module

Solar cell

[Voice Over]

Shell is building on solid experience, trading power in over 20 countries, and moving into new areas, as we help customers manage their energy use.

[Animated Sequence]

A still image of a man standing in a kitchen looking at a tablet appears. Text and icons appear on screen to show energy use as if the man in the image is adjusting the settings of his home on his tablet.

Text on screen:

Air conditioning set off (partnered with a snow flake icon)

Air conditioning set on when home (partnered with a snow flake icon)

Air conditioning set to standby when away (partnered with a snow flake icon)

Dishwasher set to run off-peak (partnered with a wine glass and fork icon)

Helping customers manage energy use

[Voice Over]

We are using technologies to enhance safety and efficiency

[Animated Sequence]

An image of a drone flying appears on screen with animated text, icons and lines to depict the drone in motion while highlighting key facts.

Text on screen:

Remotely-piloted aircraft monitors wells (partnered with an icon depicting a person)

Enhance safety and efficiency

Fly up to 900 meters (partnered with an icon of a plane taking off and moving upwards)

[Voice Over]

...deploying robots to monitor pipes and equipment.

We invested $922 million in 2017 in research and development…

[Animated Sequence]

The next image shows a Sensabot. Text and icons appear on screen to label different working parts of the Sensabot.

Text on screen:

Monitors pipes and equipment

Powerful zoom lens picks up small details (partnered with an icon depicting a camera lens)

Extendable boom for long reach (partnered with an icon to depict an extendable boom)

[Voice Over]

…as we find more ways to power progress together.

[Animated Sequence]

An image of a vehicle on a race track appears on screen with text and icons.

This image is showing the most recent Shell Eco-marathon vehicle while the text and icons highlight the message of powering progress together.

Text on screen:

Power progress together

Collaboration (partnered with an icon to depict collaboration)

Innovation (partnered with a light bulb icon)

Ultra efficiency (partnered with a cog icon)

The shell pectin appears on a final end screen.

Project

As currently designed using industry standards, this project will produce the majority of power generation for the entire island of New Providence for decades to come. It will be made up of two joint ventures – the “Terminal Company” to operate the LNG terminal, receiving, storing, and re-gasifying the LNG, and the “Power Company” to generate electricity, which will be sold to Bahamas Power and Light (BPL) for transmission and distribution. Both Power Co. and Terminal Co. are expected to be majority owned by Shell; current plans include the balance of the former held by BPL and the latter by other Bahamian investors.

Benefits

Direct foreign investment will likely be key to the islands’ economic recovery and this includes infrastructure projects like ours. A world-class LNG power plant will also help provide fuel price stability for the private sector’s long-term planning. Businesses like the important hospitality sector need predictability and not volatility as they compete in the tourism industry. These leaders of economic growth in The Bahamas are dependent on an energy system that reliably provides electricity to keep hotel rooms cool, casinos well-lit and marinas berthing cruise ships.

If this project is sanctioned, Shell aims to develop and hire Bahamian staff for the power plant and terminal, and we’ll work with our local partners to set up appropriate training and recruitment programs. In fact, the Government and Shell are discussing provisions around local hiring as part of the Heads of Agreement, with a target of 80% Bahamian staff after construction. The project also aims to purchase goods and services from local suppliers during construction and operations, helping to stimulate the local economy.

We can expect that a modernized energy infrastructure will benefit Bahamians who live on New Providence by providing reliable and affordable power to their homes. Our state-of-the-art plant will run efficiently. It will also be designed to be resilient. For example, we have included additional equipment in its design, to ensure it can withstand the brute force of natural disasters like Dorian: the backbone infrastructure of the terminal and power plant is being designed and would be built to withstand a Category 5 hurricane.

We applaud BPL’s recent fuel hedging strategy for electricity generation over the next 18 months. The LNG-to-power project would provide a highly competitive LNG price as compared to the current hedged fuel price, resulting in an overall attractive “all-in” power price to BPL.

Computer generated image of the LNG plant as it would look from the air

Environment

At Shell, we strongly support the goals of the Paris Agreement to limit the rise in the average global temperature well below 2° Celsius. A key part of our strategy is to thrive during the “energy transition,” and we see natural gas playing an important role during the transition to a lower carbon world. Seen from this environmental perspective, it’s important to note that LNG used to generate electricity in The Bahamas will produce lower CO2 emissions compared to the heavy fuel oil and diesel used in today’s generation; it will also improve local air quality by emitting fewer particulates.

Given The Bahamas’ geographical location, energy from renewables like the sun or wind is an opportunity – especially in the Family Islands – to contribute to global efforts to reduce CO2 emissions. And natural gas is an excellent partner with renewables. Texas is an example of where natural gas complements solar and wind to provide reliable power around the clock. Shell invests in both onshore and offshore wind projects across the US. In the state of Texas, Shell’s Brazos wind farm can provide enough energy to power around 48,000 homes. In May 2020, we acquired a fast-start, natural gas power plant in Houston, which complements the intermittent energy generated from wind and solar plants, in a cost-effective way.

Future

Looking forward, I am confident this project will help Bahamians meet key priorities; it can bring significant benefits to the national economy and reliability to energy customers along with environmental advantages.

Much has changed since we first signed the “Memorandum of Understanding” for this project in late 2018, especially in the last few months. But our priorities have not. We remain committed to working side by side with Bahamians to build this shared vision together, even in these times of uncertainty.

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