TELF AG illustrates the role of liquefied natural gas in an increasingly green world
Important assets
It is never easy to give up assets that generate ever-increasing income flows, not even if the global energy transition is at stake. This is the question that some of the major global giants in the energy sector are asking themselves: who may have to give up some of their main sources of revenue due to their close link with fossil fuels? The global energy transition is, in fact, pushing in the exact opposite direction, favoring renewable energy and all those productions capable of reducing carbon dioxide emissions.
These are the same doubts that in recent months have passed through the minds of Shell and its new CEO, Wael Sawan, who apparently confirmed the company’s willingness to continue investing in one of its main assets, liquefied natural gas.
The company has announced that it intends to invest 4 billion dollars per year in liquefied natural gas, to which the majority of the company’s revenues have been linked for some years. In the first half of 2023, revenues linked to the gas sector (in which a predominant position is held by liquefied natural gas) generated almost half of the total profits recorded by the brand, around 7 billion dollars. The desire to continue to focus on liquefied natural gas would seem to contradict some of the objectives already expressed by Sawan, who announced that he wanted to reach the goal of net zero emissions in 2050.
Yet, there is an explanation: the company is convinced that liquefied natural gas will have an important role in promoting the energy transition, in particular, due to its structural characteristics. Compared to oil, LNG would, in fact, produce 30% less carbon dioxide. Therefore, the company is pushing to focus on LNG in the belief that it can support and stimulate the green transition. Yet, they are aware that the fuel is still capable of emitting carbon and that it will, therefore, be necessary to find a way to reduce emissions.
The potential of LNG has already been sensed by several nations and numerous companies in different corners of the world, which have already invested significant sums of money to participate in various initiatives related to the production of this important resource.
Shell currently has several participations in LNG-focused programs in various parts of the world, such as Trinidad & Tobago, Australia, and Nigeria, and continues to rely on third-party producers to market several tonnes of this material per year. In 2022, Shell was able to generate 30 million tonnes of LNG, trading even more.
Next March, Shell will update its energy transition strategy, likely including a new operational approach to the LNG. The certainty is that this precious natural resource, so necessary for increasing company profits, will continue to play a key role, even in the plans of a company that intends to reduce its emissions within a few years.
