Upstream

Finding solutions to develop these vast resources, a large proportion of which were discovered a couple of decades ago and mostly in distant locations and often deep waters, is a challenge.

This is a business of very long-term plans and substantial investment. It involves acquiring and developing new exploration areas, making oil and gas discoveries and bringing them to market. In Australia, we do this primarily through joint ventures with other oil and gas businesses.

Natural gas has many advantages: it is clean, relatively abundant and cost-competitive. As a result, it can lead to significant reductions in greenhouse gas emissions in the power sector.

Shell is the world's largest producer of liquefied natural gas (LNG). Our Australian LNG projects contribute substantially to Shell's global LNG capacity which has more than doubled since 1989.

Shell's vision for its gas business in Australia is to substantially grow its equity LNG production which is currently around 2 million tonnes per annum (mtpa).

At present we are involved in a number of major gas projects, mainly off the north-west coast of Australia, between Dampier, Western Australia, and Darwin, Northern Territory. These include interests in the North West Shelf project, the Gorgon joint venture, the Sunrise joint venture, the Evans Shoal joint venture and the Browse (Brecknock Calliance Torosa - BCT) joint venture.

We also have a number of Shell-operated exploration interests in the Browse Basin. 

Shell is the 100% equity holder and Operator of the WA-371-P permit, an area which covers around 1,000 sq km in the remote Browse Basin, 475km north-northeast of Broome, Western Australia. During 2007, Shell discovered the ‘Prelude’ gas field and in March 2009 discovered the 'Concerto' gas field in the permit area.

As the gas reserves are relatively small and remote, Prelude and Concerto are well suited to development ‘in situ’ using Shell’s FLNG technology whereby gas will be processed on a floating facility directly over the gas field.

FLNG technology is an important development for the LNG industry as it reduces both the project costs and environmental footprint of an LNG development, thereby providing the potential to unlock some of Australia’s stranded offshore gas reserves.  There are currently no FLNG facilities deployed anywhere in the world.

Read more about the Prelude project.

The North West Shelf (NWS) project is Australia's largest resource development project with investments of approximately $27 billion. Shell has a one-sixth interest in the NWS LNG, liquefied petroleum gas (LPG) and condensate ventures of the NWS project, which we also serve as technical advisor. Shell Development Australia also has a one-twelfth interest in the domestic gas joint venture. The NWS project is operated by Woodside Petroleum Limited, in which Shell has a 34% equity stake. The other participants in the NWS project are BP, BHP Billiton Petroleum, Chevron, Mitsubishi/Mitsui and Woodside.

The NWS project has built a solid reputation for Australia as a reliable supplier of LNG to North Asia. It supplies domestic gas to Western Australia, LNG to Japan, Korea, China, Taiwan, India, Europe and the USA, and condensate and LPG to international markets. The NWS project was the first supplier of LNG to China with the first cargo of Australian LNG arriving on a Shell ship into Guangdong in May 2006. 

In addition to LNG for export, the NWS project supplies around 60% of Western Australia's domestic gas. This is pumped through the existing pipeline infrastructure from Dampier to Bunbury.

For more information about the North West Shelf project, visit www.woodside.com.au - opens in new window

Shell also holds a 25% stake in the Gorgon joint venture, which is developing Australia's largest known undeveloped gas resource.

The Gorgon and Jansz gas fields in the Carnarvon Basin are located some 130 to 200km off the coast from Dampier. The Gorgon project's first two LNG trains received environmental approval from the Australian Government in October 2007.

The other joint venturers in Gorgon are Chevron and ExxonMobil, and the project to build a liquefaction plant on Barrow Island is being managed by Chevron. A major element of the Gorgon project will be the proposed capture and storage of carbon dioxide (CO2) removed from the natural gas. This will be stored in saline reservoirs 2km below the surface of Barrow Island which sits between the gasfield and the mainland.

When it comes into operation this will be the largest greenhouse gas geosequestration project in the world, with the potential to store about 125 million tonnes of CO2 emissions. Great care is being taken to protect Barrow Island's plant and animal life. The Gorgon project has a development life of around 40 to 60 years.

For more information about the Gorgon project, visit www.chevronaustralia.com - opens in new window

Our involvement in the Browse Basin includes: the Browse LNG development where we hold a direct interest of around 9% of the Brecknock, Calliance and Torosa gas fields; and AC/P23 where we hold rights to gas from the Crux field. Shell also holds interests in the Sunrise (26.6%) and Evans Shoal (25%) gas fields in the Bonaparte Basin; as well as interests in several permits in the Carnarvon Basin.

To support our commitment to grow our gas portfolio in Australia, Shell is applying its experience and technology to undertake safe and responsible exploration and appraisal programmes in the Carnarvon, Browse and Bonaparte Basins. This is both as an operator and in various joint ventures for which Chevron and Woodside are the operators. Shell recently acquired blocks in the Southern Exmouth Basin area (Shell 100%).