Shell: the future of LNG plants?

Shell is revolutionizing LNG project design, based on reviewing 40 of the company’s gas-focused patents from 2019. The innovations can lower LNG facilities’ capex by 70% and opex by 50%; conferring a $4bn NPV and 4% IRR advantage over industry standard greenfields. Smaller-scale LNG, modular LNG and highly digitized facilities are particularly abetted. This 16-page note reviews Shell’s operational improvements, revolutionary greenfield concepts, and their economic consequences.

Pages 2-3 outline Shell’s rationale for radically re-thinking LNG project designs, and how we have assessed its progress, across c300 patents from 2019.

Pages 4-6 outline operational improvements, described in Shell’s patents, which can reduce opex by up to 50% and uplift IRRs by c3%.

Pages 7-13 outline novel LNG plant designs, based on Shell’s patents: including advanced materials, alternatives to cryogenics (which can abet small-scale LNG) and next-generation modularization. Thether these can cut capex by c70%.

Pages 14-16 outline the economic opportunities, describing how Shell’s patented innovations affect our project NAVs at LNG Canada and the US’s Lake Charles.