Shell pitches for mini LNG projects in Russia

MOSCOW: Shell may resort to developing small scale LNG facilities in Russia, a senior executive said, as its ambition to expand a major liquefied natural gas plant there appears thwarted.

Gazprom and Shell are partners in Russia's-only LNG plant on the Pacific island of Sakhalin, which produces 10 million tonnes of LNG a year.

Shell has been pushing for an increase in capacity there but the idea has failed to take shape.

Gazprom has its own plans to build an LNG plant in the Pacific port of Vladivostok.

"We are still at the early phase of thinking about this, how we could deploy this mini LNG here.

We are still at the idea generation phase," Olivier Lazare, who has headed Shell's operation in Russia since Jan.1, told reporters on the sidelines of a Shell conference on innovation.

A mini LNG plant typically produces up to 1,000 tonnes per day of gas, which can be used in mining or for filling cars.

"In North America, where we are active, we are looking into the mining sector, the marine sector, we are looking into trains, we are looking at heavy trucks.

I do not know yet which of any of these opportunities are applicable here in Russia," Lazare said.

Russian President Vladimir Putin has picked LNG production as a priority. The frozen gas is easier to market worldwide in ships unlike pipeline gas, which Russia supplies only to Europe.

The race for new customers, especially Japan, the world's top LNG consumer, has been tight with leading producers such as Australia and Qatar.