Since the 1960's Shell, along with other national and international oil companies, has been involved in liquefied natural gas (LNG). Throughout this time there has been a continued need for technical innovation and integration along the value chain. This is becoming ever more apparent, especially when considering the current challenges for the energy industry as a whole, which can be summarised as:

  1. Despite the current recession, in the mid to long-term global energy demand will continue to grow

  2. Supply of "easy" oil and gas will struggle to keep up

  3. Increasing CO2 emissions at a time when climate change is a critical global issue

Although gas resources are relatively abundant, it does not mean they will be easy to develop. There is a need to bring down the increasing cost curve for capital projects. Innovation and technology help to unlock new resources and monetise natural gas that would otherwise not have been considered technically or economically viable. Examples of this include reservoirs located in harsher environments such as Arctic climates or deep water and "difficult" feed gases contaminated with high levels of inert gases and/or sulphur species.

The Sakhalin II project is a world-class, export-orientated integrated oil and gas development that includes the construction of Russia's first baseload LNG facility. The complexity of both the process operation and plant construction was increased because of sub-Arctic conditions. Innovative solutions, such as the Dual Mixed Refrigerant (DMR) process that can be optimised for varying ambient temperature, and a jetty that can withstand ice loading, made the project feasible.

Continued research into treating difficult feed gases is vital for finding ways to recover sour gas and to utilise it, removing the H2S, CO2 and other undesirable contaminants. With around one-third of the world's gas fields being highly contaminated attention is turning towards developing these more difficult resources. The new technologies being progressed can significantly reduce project development and operating costs for highly contaminated fields.

There is demand for technology to monetize gas from different sized gas fields. A range of LNG technologies that are efficient and cost effective at different base load capacities is required. Shell has developed a suite of LNG technology options ranging from 1 mtpa to over 10 mtpa per train.

Another aspect that is changing the way LNG projects are developed is the local demand for gas and liquid products. Domestic and regional gas supply is becoming increasingly important and optimal integration with LNG projects is, for some resource holders, a must. All of these developments require a good understanding about the integration of the upstream and midstream processes as well as the demands of the domestic gas market.

This paper will provide an overview of innovation across the LNG value chain including examples from projects. Shell's approach to research and development (R&D) is discussed, including achieving technology aspirations through collaboration programmes. It is important to remember that technology innovation is not always about step changes in design; there is also focus on incremental improvements for technology in existing plants to further maximise revenues and reduce operating costs. Applying modern process control and optimisation tools can exploit these opportunities, resulting in several benefits including reduced flaring, running closer to operational constraints and more efficient operations.

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