Shell mulls LNG-hub network as use by ships and trucks expands

Royal Dutch Shell Plc, the oil company that spent more than $50bn to buy natural-gas producer BG Group Plc, is looking to expand demand for fuel in transport to ensure its output is consumed. Shell is studying developing a global network of liquefied natural gas supply hubs for vehicles including ships, Steve Hill, executive vice president for gas and energy marketing and trading, said at World Petroleum Congress in Istanbul.

Europe’s largest energy company acquired BG in 2016, gaining a 20 percent share of the global LNG market with production facilities from Australia to the US. Output of the fuel has grown as rising energy use — particularly in Asia — boosts the drive to find alternatives to coal. By developing supply hubs, Shell, which announced a ramp-up in clean energy investment, could feed the heavy-truck and marine vessel markets, increasingly important to LNG producers that traditionally serve the power sector.

“As the demand from transportation grows, that will become important” than power generation, Hill said. “In the foreseeable future over half of demand won’t come from electricity but from heavy-duty transport, trucking for roads and marine, use in chemicals.”

Shell sees opportunities in LNG and next-generation biofuels for shipping, heavy freight and air travel, Chief Executive Officer Ben Van Beurden said in Istanbul as he announced plans to invest as much as $1 billion a year in its New Energies division by the end of this decade.