Zoltan Ban: 23 July 2015
Summary
- Shell has been showing long-term interest in moving more towards natural gas for a while, with natural gas production surpassing its oil production in 2013.
- Aside from its major acquisition of BG group, it is forming an alliance with Gazprom and is looking to be among the first in Iran.
- The overall big picture suggests that Shell is giving up on North American shale gas and focusing on being a major player in conventional gas and LNG.
Before Royal Dutch Shell (RDS.A, RDS.B) acquired BG Group, it was already a major player in the gas industry. Its upstream production has been more than half natural gas since 2013 already. It is constantly looking to expand its downstream presence, with plans such as the ethylene plant it wants to build in Pennsylvania, in order to take advantage of the cheap gas in the North-Eastern part of the United States. It also has a gas to liquids plant in Qatar, which is the world’s biggest. It should be no surprise then to see Shell actively involved in setting up a tighter partnership with both Russia and Iran.