Companies producing natural gas must reduce capital costs to make gas more competitive fuel as compared to other sources of fuel, such as coal and renewable energy, said President of Royal Dutch Shell Ben Van Burden.
In his speech at the LNG conference opening in Australian Van Burden said that in the coming years demand in natural gas will be growing and the projects with the lowest operation costs will have a competitive advantage.
In order to satisfy demand, energy industry must continue investing, because this is necessary to achieve a sufficient level of deliveries, especially in the developing world, he added.
The new markets, such as Thailand, Pakistan and Poland, which used to be considered insignificant, are also opened.
Such technologies as floating energy installations could become a favorable factor for the LNG market and will help to reduce costs of the importers, which will make LNG a competitive source of energy, he believes.
According to the International Energy Agency (IEA), world demand in natural gas will grow by an average 2% from 2014 to 2020 and demand in LNG will be twice as high, said Van Burden.
Energy industry must continue investing into the innovations to reduce capital costs for LNG – from development of fields to liquation, loading and re-gasification, he said.
He also added that the most important sectors, which one should focus on, are design, engineering and construction.
“LNG plants have become more expensive, because more time is needed for their design and we meet low productivity during the construction simply because we often work in difficult conditions. We need to change this tendency,” said Van Burden.
