Shell Muscling In On CSG To LNG  

The SMH reports that Shell seems keen to be involved in coal seam gas to LNG in Queensland - Shell flexes muscle behind Arrow.

THE oil company Shell is not about to slink away from the coal-seam gas industry in Queensland if confirmation that it has secured a site for a liquefied natural gas project on Curtis Island is any indicator.

While the near-$1 billion bidding war for Pure Energy heated up yesterday, Shell said it would be joining Curtis Island, where three multibillion-dollar LNG plants involving global oil giants are already planned.

The timing of the news was telling. It came a day after Shell's joint-venture partner, Arrow Energy, had increased its bid for the junior explorer Pure to $890 million following a hostile bid of $796 million from Britain's BG Group on Monday. Until now Shell, the owner of an 11 per cent stake in Pure, had remained silent.

Arrow and Shell plan to build the region's smallest LNG project at the nearby Fisherman's Landing, but news of the Curtis Island site confirms the partners have joined forces for a much bigger play. Arrow, which owns 20 per cent of Pure, is bidding for it independently of its much larger joint-venture partner.

An analyst at Citigroup, Di Brookman, said Shell's statement was a clear show of solidarity against BG's bid. "You could say it's like big Shell walking up to Arrow and putting their arm around them."