Shell puts off LNG investment here

Corporate February 11, 2014 00:00

By Watcharapong Thongrung
The Na

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The Royal Dutch Shell Group has to delay its plan to invest in the liquefied-natural-gas business in Thailand because of the current political situation, said the top executive of the multinational oil company's Thai unit.

Asada Harinsuit, chairman of the Shell Company of Thailand, said the company would have to postpone its plan to become an LNG provider for the transport sector in the Kingdom, since the political instability affected the issuance of necessarily policy and investment-promotion regulations. 
Shell also needs to hold talks with various businesses, including automakers that produce LNG-powered vehicles and truck operators. It also needs clarification on whether the current policy to cap the retail price of diesel fuel at Bt30 a litre will continue before it can make a decision. 
Nevertheless, the company will go ahead with its plan to renovate and expand its filling stations, of which it has 500 currently, as well as increasing the production capacity of its lubricant factory. Together these projects will require an investment of Bt2 billion.
Shell is still confident in the potential of Thailand to become a regional transport hub and believes the country will be able to solve its political conflicts eventually, he said.
Up to now, partially privatised PTT has been the sole handler of natural gas in Thailand, ranging from LNG imports, to running a natural-gas pipeline network, and setting up service stations selling natural gas for vehicles (NGV). LNG is natural gas that has been converted to liquid for ease of storage and transport.
Simon Henry, chief financial officer of Royal Dutch Shell, said coal would continue be a major source of fuel for power generation in Asia but LNG, which is convenient for transport, would take on an increasing role in the region. This is evidenced by the fact that many Asian countries including Thailand, Malaysia, Singapore, China and India have plans to import more LNG.
Asada said solar power and LNG would increasingly replace oil. He said Shell, which has half of its reserves in oil and the other half in natural gas, foresaw an increasing role of LNG 
in its business since it speaks well to environmental and global-warming issues.
The two Shell executives were speaking at the “Powering Progress Together Forum” in Manila this month as part of the “Shell Eco Marathon Asia 2014”, which this year had more than 100 student teams from leading engineering faculties in 15 countries joining, including 11 teams from nine Thai educational institutes.