Dubai to build LNG regasification terminal and appoints Shell as advisor and main LNG supplier

The new facility will supplement the Emirate's existing supplies of natural gas during summer peak demand, delivering environmental and security of energy supply benefits.

DUSUP has selected Shell as adviser and project manager for the development phase. Shell will also be the main LNG supplier and will continue to provide advice to DUSUP once the facility is completed.

Golar Freeze, an existing LNG ship, will be chartered by DUSUP from Golar LNG Company and converted into a Floating Storage and Regasification Unit to be moored offshore within DP World Jebel Ali Terminal.

LNG ships will moor alongside the Golar Freeze to offload their cargoes. Gas will be piped through a sub-sea pipeline from the Golar Freeze into the Dubai natural gas pipeline network to industrial customers.

The regasification capacity of the Golar Freeze will be 3 million tonnes per annum, equivalent to 400mmscf/d of natural gas.

First gas is expected during 2010. In parallel, Shell Western LNG BV and DUSUP have signed a Sales and Purchase Agreement for the short and long-term supply of LNG to be supplied from Shell's global portfolio, primarily Qatar.

H.H. Sheikh Ahmed bin Saeed Al Maktoum, Chairman of DUSUP, said today

"Energy demand is growing rapidly in Dubai because of the strong growth of our economy. Access to the global LNG market will help Dubai to meet peak summer demand in a more sustainable way, reducing emissions and improving local air quality. Dubai will also benefit from our peak summer demand being countercyclical to the global winter demand peak in the LNG market."

Ms. Linda Cook, Executive Director of Royal Dutch Shell plc, said: "Shell is pleased to be selected by Dubai to help with this project. Dubai has many visionary projects and I think, in the field of energy, this counts amongst them. It will deliver local and global environmental benefits, and diversify Dubai's sources of energy supply."

Natural gas is a less carbon intensive fuel than the diesel fuels currently burnt for electricity production and other industrial processes in Dubai in the summer. The project will assist in alleviating the emissions of key air pollutants such as sulphur oxides, nitrogen oxides and particulates.

DUSUP is a Dubai government-owned entity that owns the gas pipeline network in the Emirate and has sole rights to supply gas users.

Shell is an LNG pioneer with a leading position amongst private companies in the growing global LNG business. Shell has the largest global LNG supply portfolio of any international oil and gas company.