A BRIEF HISTORY OF LNG

LNG 50 - A CELEBRATION OF THE FIRST COMMERCIAL SHIPMENT OF LNG / 1

BG Group
Connecting Singapore
to the global LNG market
CONTENTS

Programme & Acknowledgements 04

Patron's Message 05

President's Message 06

E&U Chairperson's Message 07

A Brief History Of LNG 08

Energy & Utilities Business Group 22

ABOUT BRITCHAM
The British Chamber of Commerce (BCCS) is one of the largest foreign business networks in Singapore with a
long and proud history celebrating its 60th Anniversary this year. TheChamber plays a pivotal role in raising the
profile of British companies, establishingrobust connections with the Singapore business community as well
asfacilitating business opportunities for companies in Singapore and the UK.

BCCS has also recently became a member of the UK business network, created by the British Chambers of
Commerce and UK Trade & Investment, providing practical support for UK exporters.

With more than 400 corporate members, represented through currently 2,600 employees, the Chamber offers
various platforms for businesses and leaders to connect, drive and develop business, learn and exchange
insights. We are committedto delivering:

Building Networks - Provide a diverse and inclusive network to build opportunities for British, international and
local organisations in Singapore with ties to British business.

Connecting Businesses - Encourage British trade and investment in Singapore and the Asia Pacific region
and to be the authoritative voice of British business.

Creating Opportunities - Provide our member companies, and executives throughout their organisations,
with practical support and advice, delivered via a range of scheduled events, on-line communities and to share
knowledge and expertise.

COVER IMAGES:
(Left to right) Methane Princess approaching the North Thames Gas Board jetty at Canvey Island U.K., Photo Courtesy of
Singapore LNG Corporation; Prelude FLNG facility under construction; Photo courtesy of Shell Photographic Services, Shell
International Ltd

LNG 50 - A CELEBRATION OF THE FIRST COMMERCIAL SHIPMENT OF LNG / 3

PROGRAMME

LNG 50: A celebration of the first commercial shipment of LNG

Tuesday 23rd September 2014
The British High Commissioners Residence at Eden Hall

19.00 Evening commences with champagne and canaps

20.00 Speeches & Toast

Welcome by Damian Adams, Vice President of Britcham and Chairperson of Britchams

Energy and Utilities Business Group

Opening remarks by The British Deputy High Commissioner Judith Slater

Reflection of the Past, Present and Future of LNG by Roger Bounds, Global Head of Shell LNG and
Steve Hill, President Global Energy, Marketing & Shipping, BG Group

Toast by Jerome Ferrier, Senior Vice President, Total and President of the International Gas Union

Closing remarks by Damian Adams

21.30 Carriages

ACKNOWLEDGEMENTS

Appreciation and thanks are due to all who have been part of the organisation of this event; to our sponsors Shell, BG, ExxonMobil
and the Chamber team and E&U Group sub-committee, and of course to all attendees. Without such support the event would
not have been possible.

We hope you will enjoy the video montage of LNG events, past and present that will be shown throughout the evening. We
would like to thank all those who contributed photographs including BG Group, Shell, Brunei LNG, GDF Suez, ExxonMobil,
Arthur Dixon AM, Excelerate Energy, Hegh LNG and the National Grid archive and to thank Keshav Sishta of Blackbird
Productions for pulling it all together.

Special thanks go to Tony Regan, of Trizen International for having authored A Brief History of LNG

A soft copy of the LNG montage is available from http://britcham.org.sg/events/past-events/2383.

GOLD SPONSOR SILVER SPONSOR BRONZE SPONSOR

4 / LNG 50 - A CELEBRATION OF THE FIRST COMMERCIAL SHIPMENT OF LNG

PATRON'S MESSAGE

In 1959, the first LNG cargo was shipped from Lake Charles, Louisiana to
Canvey Island in the United Kingdom. This paved the way for development of
the sector in the UK and, in 1964, it became the worlds first LNG importer, at
which point the commercial LNG industry was truly born.

Today, over 400,000 jobs are supported by the oil and gas industry and few
industrial sectors have generated greater prosperity for the United Kingdom.
The importance of the LNG sector continues to increase, with natural gas
being an essential part of the UKs energy mix as we move towards becoming
a low carbon economy and reduce our reliance on coal powered generation.

The UKs industrial strategy for Oil and Gas reflects the Governments
commitment to working with the industry to create the right conditions to
maximise opportunity and attract investment to the benefit of the whole UK
economy.

I am delighted that we are celebrating the last half century of this crucial
industrys evolution in partnership with the British Chamber of Commerce,
Singapore. Here, too, there is a focus on creating a forward looking dynamic
LNG sector, with UK companies playing a key role. It is only appropriate that
we commemorate the key milestones of the past together whilst looking
forward to further successes in the future.

H.E. Antony Phillipson

British High Commissioner
Singapore

LNG 50 - A CELEBRATION OF THE FIRST COMMERCIAL SHIPMENT OF LNG / 5

PRESIDENTS MESSAGE

The British Chamber of Commerce is one of the largest overseas business

networks in Singapore, with a long and proud history that sees the Chamber
celebrating its 60th Anniversary this year. The Chamber plays a pivotal role in
raising the profile of British companies, by establishing robust connections
with the Singapore business community as well as facilitating business
opportunities for companies in Singapore and the UK.

Over the years, the Chamber has continuously adapted to the changing
business landscape both locally and internationally. Ten years ago, members
from the Energy & Utilities sector highlighted the need for more active
engagement within the membership network and beyond, which resulted in
the formation of our first Business Group. Today, we have twelve Business
Groups which have become important pillars in the Chamber's ability to
deliver its mission Building Networks, Connecting Businesses and
Creating Opportunities.

The Chamber is delighted to celebrate the 50th anniversary of the first LNG
shipment a key milestone in the history of the E&U sector. I would like to
thank HE Antony Phillipson for hosting us at his residence, our sponsors Shell,
BG Group and ExxonMobil for their contribution and the continuous support of
the E&U Business Group in making this event an incredible success.

Hugo Walkinshaw
President
British Chamber of Commerce Singapore

6 / LNG 50 - A CELEBRATION OF THE FIRST COMMERCIAL SHIPMENT OF LNG

E&U CHAIRPERSONS MESSAGE

Since being formed in early 2004 as the first business group of the British
Chamber of Commerce, the Energy & Utilities (E&U) Business Group has
strived to provide members of the Chamber and the wider energy community in
Singapore with high quality events, relevant topics and expert speakers. Sotoo
with this landmark commemorative event, by which we mark 50 years since
delivery into the UK of the first commercial LNG cargo.

As you read through this booklet you will note a number of firsts in the history
of the LNG industry; the first liquefaction of methane, the first commercial
shipment of LNG to the UK and the worlds first purpose-built LNG tanker.
Equally, the evening itself represents a first for the E&U Group, namely the
first event of this scale and type conceived by a business group to mark an
historic event. As we look back on 50 years of the LNG industry, we also take
note of the present and look forward to what the future holds in store. Likewise
with the E&U group. Despite having a shorter history of just over a decade,
with over 1,700 people currently in the E&U network, a committed organising
committee and high levels of enthusiasm and interest shown by supporters of
our events, it is clear that the Group has a continuing role to play in bringing
together the energy community in Singapore and the region to network, discuss,
learn and celebrate.

Damian Adams
Chairperson of the Energy & Utilities Business Group
British Chamber of Commerce Singapore

LNG 50 - A CELEBRATION OF THE FIRST COMMERCIAL SHIPMENT OF LNG / 7

PATRONS MESSAGE

The liquefaction of methane. Cailletet 1878 Raoul Pictets (1846 1929) cascade process

A BRIEF
HISTORY
OF LNG
2014 marks the 50th anniversary of the first commercial shipment of LNG
from Arzew in Algeria to Canvey Island in the UK and the 136th anniversary
of the first liquefaction of methane by Louis Cailletet in 1878.

8 / LNG 50 - A CELEBRATION OF THE FIRST COMMERCIAL SHIPMENT OF LNG

A BRIEF HISTORY OF LNG
EARLY DAYS
T he origins of liquefied natural gas (LNG) are
to be found in the nineteenth century and the
pioneering work done by Michael Faraday (1791-
1867) in the early 1820s on the liquefaction of
gases. Faraday was able to liquefy gases with
high critical temperatures such as chlorine,
hydrogen sulfide, hydrogen bromide, and
carbon dioxide by the application of pressure
alone but could not liquefy oxygen, hydrogen,
nitrogen carbon monoxide or methane. It was
not until a half century later, that researchers
found ways to liquefy gases with lower critical
temperatures, such as oxygen, nitrogen, and
carbon monoxide. The French physicist Louis
Paul Cailletet (1832-1913) first liquefied methane
by discovering that marsh gas liquefied at 180
atmospheres and 44.6 deg F in 1878 and the
Swiss chemist Raoul Pierre Pictet (1846-1929)
developed a cascade cooling apparatus for the
liquefaction of gases and was able to liquefy
oxygen. It was not until the end of the nineteenth
century that the two gases with the lowest
critical temperatures, hydrogen (-239.7C) and
helium (-267.7C) were liquefied by the work
of the Scottish scientist James Dewar (1842-
1923) and the Dutch physicist Heike Kamerlingh
Onnes (1853-1926), respectively. By 1900 all
gases had been liquefied except helium which
was liquefied in 1908.
The first air liquefaction plant was built by the
pioneer of refrigeration, Carl von Linde (1842-
1934) in 1895 utilising counter current cooling.
In 1915 Godfrey Cabot of the USA patented
a method for storing liquid gases at very low
temperatures. It consisted of a Thermos bottle
type design which included a cold inner tank
within an outer tank; the tanks being separated
by insulation. Cabot founded the Liquid Fuel
Company in West Virginia to use LNG for
welding but the plant was abandoned in 1921.
LNG 50 - A CELEBRATION OF THE FIRST COMMERCIAL SHIPMENT OF LNG / 9
In 1937 Lee Twomey received
patents for a process for large
scale liquefaction of natural gas.
The intention was to store natural
gas as a liquid so it could be
used for shaving peak energy
loads during cold weather. The
Hope Natural Gas Company
built a trial plant in West Virginia
in 1939 that was able to liquefy
400,000 cu.ft/day but this was
dismantled in 1940 when The
East Ohio Gas Company built a
full-scale commercial LNG plant
in Cleveland, Ohio, This was the first such plant
in the world. Originally it had three spheres,
approximately 63 feet in diameter containing
LNG at -260 F. Each sphere held the equivalent
of about 50 MMscf of natural gas. A fourth tank,
a cylinder, was added in 1942 with an equivalent
capacity of 100 MMscf of gas. The plant
operated successfully for three years but was
shut down after a cylindrical tank ruptured on
October 20, 1944, spilling thousands of gallons
of LNG over the plant and nearby neighborhood.
The resultant fire and multiple casualties delayed
further implementation of LNG facilities for
several years.
Over the next 15 years new research on low-
temperature alloys, and better insulation
materials, set the stage for a revival of the industry
which started in 1951 when William Wood Prince,
the President of the Union Stockyard Company
of Chicago set out to find a cheaper source
of gas for his power requirements than was
available from his current supplier. He decided
to access cheaper southern gas, liquefy it and
transport it via the Mississippi to his Chicago
stockyards to provide refrigeration for his cold
storage plant and fuel for power generation. He
commissioned the first FLNG unit - a barge to
A BRIEF HISTORY OF LNG
liquefy, store and transport LNG. Continental Oil
(now ConocoPhillips) came in to advise on gas
processing issues and a barge, the Methane with
a cargo capacity of 5,550 cubic metres (cu.m),
was built at the Ingalls Shipyard. Although the
initial economics looked good the partners soon
had reservations about the economic viability of
the project and it was not taken forward.
William Wood Prince had set up
a research division that in 1952
became the Chicago Stock
Yards Research Company which
bought gas bearing properties
in Virginia and expanded
the research programme on
barges to include ocean-going
Methane Pioneer
transport. In 1954 Continental
loading at Lake Charles,
Louisiana 1959 Oil reviewed the research programme and
concluded that although the proposed scheme
to supply the Chicago stockyard was not
economic, trans-ocean shipments might be.
In 1955 they joined Union Stockyards to form
the Constock Liquid Methane Corporation with
trans-ocean shipments in mind taking LNG
from the gas fields of Venezuela to the UK. This
caught the attention of the British Gas Council
who in 1957 agreed with Constock to jointly
convert a freighter into an LNG carrier. Constock
would liquefy the gas near Lake Charles and BG
would receive it at Canvey Island in the UK.
In January 1959, the worlds first LNG tanker,
1
Built by Pritchard (US) The Methane Pioneer, a converted World War II
and Technip (France) liberty freighter built in 1945 and originally called
the Marline Hitch, carried 5,000 cu.m of LNG
in five 7,000 bbl aluminum prismatic tanks with
balsa wood supports and insulation of plywood
and urethane from Lake Charles Louisiana to
Canvey Island in the Thames estuary. She took
a total of 8 cargoes of LNG from Lake Charles
to Canvey Island, the last being in March 1960.
In 1960, Shell joined Constock to form
10 / LNG 50 - A CELEBRATION OF THE FIRST COMMERCIAL SHIPMENT OF LNG
Conch International Methane Limited (Shell &
Continental Oil Co 40% each, Chicago stock
Yard 20%) and attention moved from developing
Venezuelan gas reserves to developing newly
discovered gas reserves in Algeria. Conch
formed the Companie Algerienne du Methane
(CAMEL) with the French owners of the Hassi
RMel gas field inAlgeria and announced plans
to build the Arzew LNG plant. Construction of
the 1 million tonne pa (mtpa) plant commenced
in 19611 and a Gas Supply Agreement was
signed with the British Methane Ltd (50/50 BGC
&Conch) in 1962.
FROM HASI RMEL IN THE
SAHARA TO LEEDS
Canvey Island LNG terminal (BG Group)
The CAMEL liquefaction plant at Arzew was
completed on the 10th September 1964 and
was officially opened on 27th September. Conch
International Methane (Shell 40%, Continental
Oil 20%, Union Stock Year & Transit of Chicago
40%) had a 40% share in the plant. On the 7th
of October 1964, the first commercial cargo of
LNG was shipped from Arzew to Canvey Island
on the Methane Princess. The cargo arrived
on the 12th of October and the regasified
LNG was dispatched from Canvey Island via
the 250 mile Gas Council pipeline to eight gas
boards in London, Birmingham, Manchester
and Leeds. The Arzew plant had three parallel
liquefaction trains each capable of producing
A BRIEF HISTORY OF LNG

17,000 Bbls/day of LNG (about 1.5 MMscf/ Wolff shipyard in Belfast.

day). The total cost of the CAMEL LNG project Both ships were fitted
was estimated to be US$89 million and the FOB with Conch independent
price for the first cargo was 53 cents/MMBtu. aluminum cargo tanks and
Interestingly the delivered price was 76 cents/ had a capacity of 27,000
MMBtu2 suggesting the freight was a far larger cu.m. They were operated
component of thecost build up than it is today. for British Methane Ltd
by Shell Tankers UK and
In March 1965 the first shipment to France between them they made
was made on the Jules Verne to Le Havre. Two about 1,000 voyages. The
thirds of the production was now being sold to Methane Progress went out
the British Gas Council and one third to Gaz de of service in 1986 whilst the Methane Princess Methane Progress
France. remained in service until 1997. The Jules Verne
was built by the Le Trait shipyard and had cargo
capacity of 25,000 cu.m.

By the end of the next ten years there should

be some 20-30 methane carriers3 in operation
around the world, carrying, say 2,000 MMscf/d
C.P.Coppack, Managing Director,
Conch Methane Services, Sept 1963.

THE GREAT RACE

In 1962 Phillips discovered natural

gas in the North Cook Inlet near
Kenai in Alaska, whilst in 1963 Shell
discovered the South West Ampa gas
Jules Verne, (GDF SUEZ) Negeshi LNG terminal
field off Brunei. Both sought to monetize the
Tokyo, (Tokyo Gas)
reserves as LNG and sought sales into Japan.
In 1965 the Algerian government took a 20% After an often bitter battle between the two
stake CAMEL and In 1977 CAMEL was acquired parties Philips and Marathon4 signed the first
2
A pint of beer in a
Canvey Island pub cost
by the Societe National pour la Recherche, la Asian LNG sales and purchase agreement in 6 pence (20 US cents)!
Production, le Transport, la Transformation et March 1967 with Tokyo Gas and Tokyo Electric
la Commercialisation des Hydrocarbures or at a price of 52 cents/MMBtu delivered Japan. 3
There were 12 LNG
Sonatrach. The first delivery of Alaskan LNG into Japans carriers operating in
1973 and this number
first LNG receiving terminal at Negishi took place
rose to 18 in 1975
The first purpose built LNG carriers was built in in November 1969.
1963. The Methane Princess was built by Vickers 4
Philips and Marathon
Armstrong at Barrow in Furnace, launched in The two train, 1.3 mtpa liquefaction plant at had agreed to combine
1963 and entered service in 1964. This was Kenai was built by Bechtel and cost considerably their Alaskan gas
reserves in 1966
followed shortly by the Methane Progress which more than the Arzew plant at an estimated cost
was launched in 1964 from by the Harland and of US$200 million.

LNG 50 - A CELEBRATION OF THE FIRST COMMERCIAL SHIPMENT OF LNG / 11

A BRIEF HISTORY OF LNG

1970S consisted of four trains able to produce 3.7

EARLY DAYS mtpa was significantly larger than its three
predecessors. Algerias second liquefaction
Although Exxons plant at Skikda also came on stream in 1972.
proposed Marsa Perhaps the most significant development of the
el Brega LNG 1970s was the development of major export
plant in Libya had plants in Indonesia. In 1972 Pertamina, Huffco,
concluded sales Mobil and Nissho Iwai teamed up to develop
agreements with Indonesian LNG exports based on two plants
Brunei LNG that would be built simultaneously in Bontang
Italian and Spanish buyers in 1965 a number of
problems and issues delayed construction and and Arun. Japan and the US were regarded as
first commercial production was in April 1970. the only markets that could possibly support
The four train Marsa el Brega plant used the then two plants but although Pacific Lighting Corp
novel mixed refrigerant liquefaction technology of California expressed interest in a 20 year
provided by Air Products. purchase agreement with Arun they were unable
to secure US government approvals and the
Shell, Mitsubishi and the Brunei government focus turned to Japan.
finally managed to sign sales and purchase
agreements with Tokyo Electric, Tokyo Gas The oil crisis of October 1973 heightened
and Osaka Gas in 1970 and Brunei LNG came Japans interest in LNG and in December of
on stream in 1972. The plant, which initially that year Pertamina signed an SPA for a total of
8.18 mtpa with Chubu Electric, Kansai Electric,

Canvey Island 1959 Marsa El Brega 1970

Le Havre 1964 4 trains 0.75 mill tn
Barcelona 1969
La Spezia 1971 ADGAS Abu Dhabi 1977
Fos 1972 Alaska
2 trains 3.2 mtpa

Negishi 1969
Senbouku 1972 & 1977
Kenai 1969 Everett 1971 Sodeguara 1973
Two trains 1.3 mill tn Chita 1977
Tobata 1977
Algeria Libya Himeji 1979

Brunei 1972
5 trains, 7 mill tn
Arzew GL4Z 1964
3 trains 1.1 mill tn

LNG liquefaction plants Skikda 1972 Bontang 1977

3 trains 3 mill tn 2 trains 3.3 mill tonnes
LNG receiving terminals
Arzew GL1Z 1978 Arun 1978
6 trains 7.7 mill tn 3 trains 5.1 mill tonnes
1964 1969 1970 1972 1977 1978
Arew Alaska Libya Skikda, Brunei ADGAS, Bontang Arew, Arun

12 / LNG 50 - A CELEBRATION OF THE FIRST COMMERCIAL SHIPMENT OF LNG

A BRIEF HISTORY OF LNG

First liquefaction projects 1964-1979

Mill tn Start Shareholders
Arzew GL 4Z T1-3 Algeria 1.1 1964 Sonatrach
Alaska USA 1.3 1969 Marathon, ConocoPhillips
Marsa El Brega Libya 0.8 1970 Sirte
Skikda Algeria 3 1972 Sonatrach
Brunei LNG Brunei 7 1972 Brunei Govt, Shell,
Mitsubishi
ADGAS Abu Dhabi 3.2 1977 ADNOC, Mitsui, BP, Total
Bontang T1/2 Indonesia 3.3 1977 Pertamina
Arun T1-3 Indonesia 5.1 1978 Pertamina
Arzew GL 1Z T1-6 Algeria 7.8 1978 Sonatrach
32.6

Osaka Gas, Kyushu Electric and Nippon Steel.
Bechtel were contracted to design, engineer
and construct the two plants which were to
cost US$1.64 billion, considerably more than
the US$89 million the Arzew plant had cost ten
years earlier. The two train Bontang LNG plant
with a capacity of 3.3 mtpa came on stream in
1977 and the first cargo was delivered to Osaka
in August of that year. The larger, three train 5.1
mtpa Arun plant, was commissioned in 1978.
For the next twenty years Indonesia was the
worlds largest LNG exporter.
The first LNG plant in the Middle East was built
at Das Island in Abu Dhabi. The Gas Liquefaction
Project Agreement was signed in 1971, a 20-
year Sale Agreement with Tokyo Electric was
signed in 1972 and construction of the ADGAS
plant started in 1973. Trains 1 and 2 were
commissioned in 1977, each with an operating
capacity of 1.6 mtpa. A third 4 mtpa train, then
the largest and most advanced in the world, was
subsequently added in 1994. ADGAS is owned
by Abu Dhabi National Oil Co. (70%), Mitsui
(15%), BP (10%) and Total (5%).
Fifteen years after the start up of the first
commercial LNG plant in Algeria there were
eight liquefaction plants operating globally with
a total capacity of almost 33 mtpa and the first
plant at Arzew had been expanded to reach
a total capacity of 8.9 mtpa. In 1979 Algeria
exported 8.5 million tonnes of LNG and global
sales reached 24.7 million tonnes. 14 million
tonnes went to Japan and the second largest
buyer was the USA, taking 5.3 million tonnes.
The world fleet was then 52 ships.
THE US FALLS IN LOVE WITH
LNG (ACT 1)
The Canvey Island receiving terminal opened
in 1959, Le Havre in 1964, Barcelona and
Negishi in 1969 and the first US terminal,
Everett, Massachusetts opened in 1971. Gas
was not permitted as a power generation fuel
in the US causing a constraint on production
and the perception that there was a shortage
of gas. A number of companies therefore
sought to import LNG and between 1969 and
1976 six long term LNG supply contracts were

LNG 50 - A CELEBRATION OF THE FIRST COMMERCIAL SHIPMENT OF LNG / 13

A BRIEF HISTORY OF LNG
signedand three more receiving terminals were
built - Cove Point (1978), Elba Island (1978)
and Lake Charles (1982). Unfortunately, price
deregulation stimulated domestic production
and gas prices fell, making LNG imports
uncompetitive. Imports of LNG which had hit
5.3 million tonnes in 1979, fell to less than 2
million tonnes in 1980 and gradually declined
to zero by 1987. This had a major impact in
Algeria resulting in the Arzew and Skikda plants
operating at less than half capacity for more than
a decade and lengthy litigation as US buyers
sought to terminate their contracts.
THE 1980S MALAYSIA AND
AUSTRALIA JOIN THE CLUB
Shell discovered substantial gas reserves off
Sarawak in 1968, but it took ten years before the
development options could be agreed with the
government of Malaysia.
In 1978 Malaysia LNG Sdn
Bhd was incorporated to
develop the first Malaysian
LNG project, MLNG
Satu. Shareholders were
Petronas (65%) Shell &
Mitsubishi (each with
15%) and the Sarawak
State Government (5%)
North West Shelf LNG and the project included 5
Karratha WA LNG carriers. SPAs were executed with Tokyo
Electric and Tokyo Gas and the first cargo
sailed to Japan in January 1983. MLNG Satu
contained three liquefaction trains with a total
design capacity of 6 mtpa. MLNG Dua came on
stream in 1995 and MLNG Tiga in 2003. Total
capacity at Bintulu is now 24.4 mtpa.
Australias first LNG project had a similar lengthy
gestation period. Woodside discovered the
North Rankin gas in 1971, the West Australian
government passed the North West Gas
14 / LNG 50 - A CELEBRATION OF THE FIRST COMMERCIAL SHIPMENT OF LNG
Development (Woodside) Act in 1979, but it
wasnt until 1981 that the project participants
were able to secure interest from Japanese
buyers. A downturn in the Japanese economy
and competition from other proposed projects,
including the Canadian Dome Project, made
it difficult to secure commitments, but in 1982
initial SPAs were signed with five Japanese
buyers. Mitsubishi and Mitsui joined the North
West Shelf venture in 1984 and in May of 1985
formal SPAs were signed with five Japanese
power cos and three gas cos allowing the
project to go ahead.
There were six joint venture participants in the
North West Shelf Venture; Woodside, BHP
Billiton, BP, Chevron, Shell and Japan Australia
LNG (a JV between Mitsubishi and Mitsui) and
the plant at Dampier started up in 1989 with
three liquefaction trains with a total capacity
of 7.5 mtpa. The project, which included the
development of North Rankin A, then the largest
gas production platform in the world, and subsea
infrastructure to draw gas from the N.Rankin
and Perseus fields, cost $25 billion, and was,
at the time the largest resource development in
Australian history and the largest engineering
project in the world. A fourth train was added in
2004 and a fifth in 2008 bringing total capacity
up to 16.3 mtpa.
25 YEARS
In 1989, 25 years after the first shipment of
LNG from Algeria there were 10 liquefaction
plants operating in Algeria, Abu Dhabi, Australia,
Brunei, Indonesia, Libya, Malaysia and the
USA. Exports had reached 48 million tonnes,
Japan imported 32 million tonnes and the
secondlargest importer was France at 7 million
tonnes. The global LNG fleet now consisted of
70 vessels.
A BRIEF HISTORY OF LNG
THE 1990S AND THE ENTRY
OFQATAR
The 1990s were a period of rapid development
for the LNG industry with the entry of Qatar,
Oman, Nigeria and Trinidad. It hadnt however
been a smooth entry. Weak demand in the
1980s had made it very difficult for these
projects to secure customer support. The
Qatar Liquefied Natural Gas Company Ltd
was set up in 1984 by QGPC, BP and CFP
(now Total) but struggled to secure customer
interest, particularly as Australias NW Shelf
project was developed. Mitsui and Marubeni
joined the partnership in the late 1980s and BP
relinquished its share in 1992 to be replaced by
Mobil who took a 10% interest. Qatargas was
able to secure its first SPA with Chubu Electric
in May 1992 and awarded the EPC contract
for the construction of the plant in May 1993
to Chiyoda. The three train, 10 mtpa Qatargas
plant came on stream in 1997. In August 1992
Ras Laffan Natural Gas Ltd (RasGas LNG) was
established with QGPC holding a 70% interest
and Mobil 30%. With support from Mitsui,
RasGas secured a 25 year SPA with Korea Gas
LNG 50 - A CELEBRATION OF THE FIRST COMMERCIAL SHIPMENT OF LNG / 15
Corporation in October 1995 and the 6.7 mtpa
RasGas plant came on stream in 1999. The cost
of the LNG plant and upstream facilities was
US$3.26 billion. The early 1990s was a sellers
market allowing Qatar to secure additional SPAs
and considerably expand both projects until,
in2006, Qatar overtook Indonesia as the largest
LNG producer with a total production capacity
of 77 mtpa including six mega trains of 7.8 mtpa
each.
An LNG Working Committee was formed in
1985 in Nigeria to promote an LNG project and
in 1989 Nigeria LNG Ltd was formed owned
by NNPC, Shell, Total and ENI. It took several
years to secure customer support and arrange
the financing but in 1995 an EPC contract was
awarded to construct two trains with a capacity
of 6.6 mtpa. These were commissioned in 1999
and the plant was subsequently expanded by
the addition of train 3 in 2002, train 4 & 5 in 2006
and train 6 in 2007 to give it a total capacity
of 21.1 mtpa. In 1999 Trinidad LNG came on
stream to be closely followed by Oman LNG in
2000.
A BRIEF HISTORY OF LNG

New liquefaction projects 1991-2000

Mill tn Start Shareholders
Bontang TF Indonesia 3.2 1993 Pertamina
ADGAS T3 Abu Dhabi 4 1994 ADNOC, Mitsui, Total
MLNG Dua Malaysia 7.8 1995 Petronas, Shell, Mitsubishi, Sarawak
Govt.
Qatargas Qatar 10 1997 Qatargas, ExxonMobil, Total,
Marubeni, Mitsui
Bontang TG Indonesia 3.2 1998 Pertamina
Bontang T H Indonesia 3.2 1999 Pertamina
Atlantic LNG Trinidad 3.2 1999 BP, BG, Repsol, NGC T&T, CIC
RasGas Qatar 6.7 1999 Qatar Petroleum, ExxonMobil, Itochu,
LNG Japan, KOGAS
NLNG T1/2 Nigeria 6.6 1999 NNPC, Shell, Total, Agip
Oman LNG Oman 7.1 2000 Oman Govt, Shell, Total, Korea LNG,
Mitsubishi, Mitsui, Itochu, Partex
55

2000-2010 - A DECADE OF
FAST GROWTH
The 1990s saw 55 mtpa of new LNG capacity
come on line from ten projects but the next
decade saw a boom in LNG plant construction
with almost 160 mtpa of new capacity coming
on line from 17 projects in 14 countries. The
LNG business went truly global from Peru in
South America to Sakhalin on the Russian
Pacific coast via Snohvit in northern Norway.
The chief driver for this rapid expansion was US
demand or in particular, forecast demand. In
2003 the National Petroleum Council forecast
that domestic gas production would only be able
to meet 75% of US demand, with the balance
having to be imported as LNG. By the end of
2003, 31 LNG receiving terminal projects had
been announced in the US, Canada and Mexico
and over the next few years 11 new liquefaction
projects were announced in Norway, Equatorial
Guinea, Yemen, Angola, Peru, Indonesia, Qatar,
Egypt and Trinidad with the assumption that
the bulk of their production would be supplied
to North America. The US reopened its 3
mothballed LNG import terminals and built 11
more but, for many, the LNG never arrived.
LNG imports peaked at 16 mtpa in 2007 and
declined thereafter due to the development of
domestic shale gas.
By 2010 global sales of LNG had reached 193
million tonnes from 24 projects in 18 countries.
The largest importer in 2010 was Japan (69
mtpa) followed by Korea (33 mtpa) Spain (20
mtpa) and the UK (14 mtpa). India started
importing LNG in 2003 and China in 2006 and
by 2010 imports into China had reached 9.5

16 / LNG 50 - A CELEBRATION OF THE FIRST COMMERCIAL SHIPMENT OF LNG

A BRIEF HISTORY OF LNG

mtpa. Korea built its first LNG carrier in 1994
(HHIs Hyundai Utopia) and by 2000 became
the worlds largest LNG shipbuilder constructing
10out of 13 ships in that year.
THE PRESENT AND
THEFUTURE
Woodsides Pluto LNG (5 mtpa) project in
Western Australia came on stream in 2012
and Angola LNG (5.3 mtpa) in 2013. The
latest addition to the LNG family is PNG LNG
(6.9 mtpa) which was completed in April 2014
and the first shipment left for Tokyo Electric in
May. Production reached full capacity in July by
which time 15 cargoes had been exported. BP
had first proposed an LNG project in PNG after
discovering the Hides Field in
1987. In the early 2000s plans
to export the gas by pipeline to
Australia were developed but
in 2007 this plan was dropped
in favour of exporting as LNG.
In 2008 a Gas Agreement was
signed by the project sponsors
and the PNG government
which established the fiscal Spirit of Hela loading the
and legal framework for the PNG LNG Project, first shipment of LNG
including a unique Benefits Sharing Agreement from PNG LNG May
to ensure economic benefits flowed to the PNG 2014 (ExxonMobil)
people. The project was sanctioned in December
2009 and between December 2009 and March
2010 sales and marketing agreements were
signed with four major customers (Sinopec,

New liquefaction projects 2000-2010

Mill tn Start Shareholders
NLNG T3 Nigeria 2.9 2002 NNPC, Shell, Total, Agip
Atlantic 2/3 Trinidad 6.6 2003 BP, BG, Repsol
MLNG Tiga Malaysia 6.3 2003 Petronas, Shell, Nippon Oil, Mitsubishi

RasGas II Qatar 4.7 2004 Qatar Petroleum, ExxonMobil

NWS T4 Australia 4.4 2004 Woodside, BHP, BP, Chevron, Shell, Mitsub-
ishi, Mitsui
ELNG Egypt 3.6 2005 BG, Petronas, Egas, EGPC, GdF Suez
ELNG T2 Egypt 3.6 2005 BG, Petronas, Egas, EGPC
SEGAS Egypt 4.9 2005 Union Fenosa, ENI, Egas, EGPC
RasGas II T2 Qatar 4.7 2005 Qatar Petroleum, ExxonMobil
Qalhat LNG Oman 3.7 2005 Oman Govt, Oman LNG, Union Fenosa,
Itochu, Mitsubishi, Osaka Gas
Atlantic LNG T4 Trinidad 5.2 2006 BP, BG, Repsol, NGC T&T
NLNG T4/5 Nigeria 7.6 2006 NNPC, Shell, Total, Agip
Darwin LNG Australia 3.7 2006 ConocoPhillips, ENI, Santos, Inpex, Tepco,
Tokyo Gas
NLNG T6 Nigeria 4 2007 NNPC, Shell, Total, Agip

LNG 50 - A CELEBRATION OF THE FIRST COMMERCIAL SHIPMENT OF LNG / 17

A BRIEF HISTORY OF LNG

New liquefaction projects 2000-2010

Mill tn Start Shareholders
Equatorial E. Guinea 3.4 2007 Marathon, Sonagas, Mitsui, Marubeni
Guinea
RasGas II T3 Qatar 4.7 2007 Qatar Petroleum, ExxonMobil
Snohvit LNG Norway 4.1 2008 Statoil, Total, GdF Suez, Hess, RWE-DEA
NWS T5 Australia 4.4 2008 Woodside, BHP, BP, Chevron, Shell, Mitsub-
ishi, Mitsui
Qatargas II T1 Qatar 7.8 2009 Qatar Petroleum, ExxonMobil
Qatargas II T2 Qatar 7.8 2009 Qatar Petroleum, ExxonMobil, Total
Sakhalin LNG Russia 9.6 2009 Gazprom, Shell, Mitsubishi, Mitsui
Yemen LNG Yemen 3.4 2009 Total, Hunt, YGC, SK, KOGAS, Hyundai,
YGA
RasGas III Qatar 7.8 2009 Qatar Petroleum, ExxonMobil
MLNG Dua Exp Malaysia 1.7 2009 Petronas, Shell, Mitsubishi, Sarawak Govt
Tangguh Indonesia 7.6 2009 BP, MI Berau, CNOOC, Nippon Oil, KG
Berau, LNG Japan, Talisman
RasGas III T2 Qatar 7.8 2010 Qatar Petroleum, ExxonMobil
Peru LNG Peru 4.5 2010 Hunt, SK, Repsol, Marubeni
Qatargas III Qatar 7.8 2010 Qatar Petroleum, ConocoPhillips, Mitsui
Qatargas IV Qatar 7.8 2010 Qatar Petroleum, Shell
Yemen LNG T2 Yemen 3.4 2010 Total, Hunt, YGC, SK, KOGAS, Hyundai,
YGA
159.5

Osaka Gas, Tokyo Gas and CPC). Construction
work began in early 2010 and in April 2014,
the PNG LNG Project started production of
LNG ahead of schedule. The partners in PNG
LNG are ExxonMobil 33.2%, Oil Search 29%,
National Petroleum Company of PNG Limited
(NPCP) 16.6%, Santos 13.5%, JX Nippon Oil
4.7%, MRDC (PNG landowners) 3%.
Many of the recent developments in the
industry have been driven by technological
advancements including:
The development of horizontal drilling and
hydraulic fracturing in North America, which
has enabled gas and oil to be extracted from
shale. The rapid ramp up of production has lead
to a significant number of parties developing
plans to export the gas as LNG. 26 LNG export
facilities have been proposed in the USA and
20 in Canada. Two, Sabine Pass (18 mtpa) and
Cameron LNG (12 mtpa) have been sanctioned
and these hope to start up in 2015 and 2018.

18 / LNG 50 - A CELEBRATION OF THE FIRST COMMERCIAL SHIPMENT OF LNG

A BRIEF HISTORY OF LNG

Queensland Curtis LNG facility, produce 3.6 mtpa of LNG,

Queensland (BG Group) 1.3 mtpa of condensate
and 0.4 mtpa of LPG. It
Unconventional gas production in Australia is being built at Samsung
has put Australia on track to becoming the Heavy Industries Geoje
worlds largest LNG producer by about 2018. shipyard in South Korea
Seven LNG projects are under construction and once constructed
in Australia with three, (Queensland Curtis, the facility will be towed
Gladstone LNGand Australia Pacific) being built to its location over
on Curtis Island at Gladstone in Queensland the Prelude gas field,
LNG FSRU
using coalbed methane as their feedstock. The approximately 475 kilometres north-northeast (Hoegh LNG)
worlds first CBM to LNG plant, BGs 8.5 mtpa of Broome, Western Australia where it will
Queensland Curtis facility is expected to be remain permanently moored at the location for
completed in Q4 2014. around 20-25 years before needing to dock for
inspection and overhaul. The shareholders are
The first floating storage and regasification Shell 67.5%, Inpex 17.5%, CPC 5% and Kogas
vessel (FSRU) went into operation off Louisiana 10%. Petronas has sanctioned two FLNG units
in the USA in 2005. Floating storage has proved the first of which is scheduled to go into service
to be much cheaper than conventional onshore off Sarawak in 2015.
storage terminals and can be deployed in
months rather than the 3-4 years it takes to build Today:
a conventional onshore terminal. 17 FSRUs are There are 29
now in operation around the world with five liquefaction projects
more scheduled to go into service in 2014/15 in 20 countries with
in Lithuania, Jordan, Egypt, Uruguay and Puerto a total capacity of
Rico. 310 mtpa.
F ou rt e e n n e w
These have been a real game changer and liquefaction
now the majority of terminal proposals assume projects are under
utilising an FSRU. construction plus
additional trains at
The next big game changer will be the Arzew and Bintulu
introduction of floating liquefaction plants bringing on over
(FLNG). Shell sanctioned the first floating 120 mtpa of new
liquefaction project, Prelude, in 2011 to be liquefaction capacity between now and Prelude FLNG (Shell)
followed by Petronas and Exmar in 2012. Four 2018.
FLNG units are now under construction with Seven of the new plants are in Australia
two expected to start up in 2015. Eight more and by 2018 liquefaction capacity there will
FLNG projects are at the pre FEED/FEED stage reach 86 mtpa and Australia may overtake
of development with 20 more at the planning/ Qatar as the largest LNG producer.
development stage. The Prelude FLNG unit will An unprecedented 65 proposed projects
be the largest vessel ever built and is designed to are offering in excess of 600 mtpa of new

LNG 50 - A CELEBRATION OF THE FIRST COMMERCIAL SHIPMENT OF LNG / 19

A BRIEF HISTORY OF LNG

Floating liquefaction projects under construction

Leader Topsides LNG Hull Storage Project status Location
(Constructor) Liquefac- mtpa Contain- m3 Project
tion ment
Shell Technip 3.6 Barge 220,000 + FEED completed Australia
(Samsung) Shell DMR Membrane 90,000 2009 Prelude
LPG + Sanctioned May 2011
126,000 Start Up 2017
Conden-
sate
Petronas Technip/ 1.2 Barge FEED completed Malaysia
(DSME) Linde Membrane 2012 Sarawak
AP-NTM Sanctioned 2012
Start up Q4 2015
Exmar Black & 0.5 Barge 16,100 + Sanctioned 2012 Colombia
(Wison) Veatch 140,000 Start up Q1 2015 Pacific
SMR floating Rubialas
storage
Petronas JGC 1.5 Barge FEED completed Malaysia
(Samsung) AP-NTM Membrane 2013 Sabah
Sanctioned 2014
Start up 2018

LNG capacity into the project pipeline

with over 530 mtpa being offered from
five countries USA, Canada, Russia
Mocambique and Tanzania.
LNG exports were 241 million tonnes in
2013.
Growth over the next 5 years is going to be
mainly in China and India with uncertainty about
Japan. China will overtake Korea as the second
largest LNG importer with imports of about 50
mtpa by 2018.

Demand had been expected to double between
2010 and 2020 but after three years of flat
growth (2012-2014) it now looks unlikely that it
will. However it could be close, which means that
despite all the new capacity coming on between
now and 2018, there is a need for several more
projects to be sanctioned in the next couple of
years to bring on a further 35 million tonnes by
2020.
We are also on the cusp of the development of
a major new market for LNG the transportation
sector. There is growing awareness of the
economic and environmental drivers favouring
the adoption of LNG as a transportation fuel
with it looking as if in many countries truck,
train and heavy plant operators may be able to
reduce fuel bills by about 30% by using LNG
rather than diesel. First movers were in the US

20 / LNG 50 - A CELEBRATION OF THE FIRST COMMERCIAL SHIPMENT OF LNG

A BRIEF HISTORY OF LNG
and Canada, but the largest and fastest growing
market is in China. There is a focus on offering
LNG as marine fuel in Europe and North America
ahead of a significant reduction in permitted fuel
sulphur levels in 2015, but in China the focus is
on the truck market, in Indonesia the focus is on
remote power and mining plants and in Australia
to mines and road train operators. LNG is a very
attractive diesel replacement in many countries
and potentially this market could be as large,
and possibly larger, than the traditional power,
city gas and industrial markets.
The Golden Age of Gas is leading to the
Golden Age of LNG. LNG exports now account
for 10% of world gas consumption and this
share will grow over the next few year. LNG is no
longer a niche business with producers, mainly in
Asia and the Middle East focusing on the market
in NE Asia but is rapidly becoming global. LNG
liquefaction is no longer the preserve of major
NOCs and multinational oil companies with
new independent players entering the market.
Instead of LNG having to be delivered into large
import terminals before distribution to multiple
LNG 50 - A CELEBRATION OF THE FIRST COMMERCIAL SHIPMENT OF LNG / 21
end users it can now be delivered to individual
plants and customers. Nearly every country that
does not currently import LNG seems to have
plans to build LNG receiving terminals. On 7
August the Ministry of Energy in Myanmar gave
eight companies permission to import LNG and
the first small parcel of 1,780 tonnes arrived on
the 23rd August marking Myanmars entry as
an LNG importer. Vietnam and the Philippines
hope to follow shortly and, from there being no
LNG importers in South East Asia in 2010, we
could find that all South East Asia countries, with
possible exception of Cambodia and Laos, will
be importing LNG by 2020.
The future looks bright for LNG and we have
come a very long way since the first commercial
shipment in October 1964.
Tony Regan of TRI-ZEN International would like
to thank Arthur Dixon AM for his early history of
liquefaction, BG and Shell for their valued contributions
and, in particular, Philip Weems of King & Spalding
LLP for permitting the inclusion of material from his
paper LNG at 50, History and Projected Future for
Natural Gas Exports.
ENERGY & UTILITIES BUSINESS GROUP
The Energy and Utilities Business Group has regular events open to members, their guests and the invited wider energy-related
community. Activities are often coordinated and shared with other energy-interest groups in an attempt to provide a truly
broadand open forum. Over the past few years events have seen distinguished energy business figures address the issues
that are impacting the business in our region. Speakers have come from across the sector including from multi-nationals,
suchas Shell, ExxonMobil, BG and BP; thought leaders such as Lord Oxburgh, economic gurus from Energy Intelligence,
Platts and Petroleum Argus as well as Singapore LNG, DNV-GL, Flex LNG, the Energy Studies Institute and the Indonesian
Petroleum Association.

COMMITTEE MEMBERS

Chairperson Group Representative Group Representative

Damian Adams Benjamin Arnott Anthony Barker
Simmons & Simmons Standard Chartered Bank BG Asia Pacific Pte Ltd

Group Representative Group Representative Group Representative

Richard Bailey Philip De Waal Nicola Hewett
DNV GL - Oil & Gas Maxwell Drummond International British High Commission

Group Representative Group Representative Group Representative

Don Mackay Bree Miechel Tim Rockell
BW Maritime Simmons & Simmons KPMG

Group Representative
Tony Regan
Tri-Zen International Pte Ltd

PAST E&U BUSINESS GROUP EVENTS

3 July 2012:
Energy and Environment
in a Changing Climate
Speaker: Lord Oxburgh KBE
22 October 2012:
Global LNG Market Forward Outlook
Speaker: Matt Schatzman - Executive
Vice President, Global Energy Marketing
and Shipping, BG Group
1 November 2013:
The Outlook for Energy:
A View to 2040
Speaker: Rob Gardner - Manager,
Economics & Energy Division,
Corporate Strategic Planning
Department, ExxonMobil Corporation
Fifty years ago, Shell was proud to
have been involved in the worlds HALF A
CENTURY OF
first commercial liquefaction plant
in Algeria and the voyage of the

FIRSTS
first commercial liquefied natural
gas (LNG) cargo. Now, Shell is
at the forefront of the next first for
the LNG industry: floating LNG
(FLNG), which will allow gas to
be liquefied at sea.

LEARN MORE
ABOUT THE
PIONEERING
PRELUDE FLNG AT:
www.shell.com/flng