Shell Energy Singapore

Title: Tom Summers, SVP LNG Marketing and Trading | Shell leaders in Singapore

Duration: 8:28 minutes

Description:

In this Shell Leaders in SG episode, Joshua Lim, Global Head of LNG Trading, speaks with Tom Summers, Senior Vice President, Shell LNG Marketing and Trading on the roles of Shell, Singapore and Asia in the LNG market and the energy transition.

{insert title of video} Transcript

0:12

Hi Tom, welcome to Singapore.

0:14

Let's talk about liquefied natural gas.

0:16

Can you elaborate on the role of LNG

0:18

in the energy transition?

0:19

Thanks, and it's great to be here, Josh.

0:22

Yeah, LNG plays a critical role in the energy transition.

0:25

We're seeing a growth in population,

0:27

we're seeing an increase in prosperity,

0:30

and with that, energy demand is growing,

0:32

and so we need to find ways to bring lower carbon fuels

0:35

to the energy markets.

0:37

And we need to also be able to have a balanced transition

0:41

through to net zero emissions.

0:43

So LNG does a great job in many places.

0:45

Firstly, displacing coal in industry

0:50

where it can really make a difference

0:51

in terms of efficiency and emissions.

0:54

Secondly, LNG and gas can displace coal

0:59

for power generation.

1:00

And so when used for power generation,

1:02

it's around 50% of the emissions of coal.

1:05

But it doesn't just stop there.

1:07

What we're seeing with our business,

1:09

particularly here in Singapore,

1:11

is LNG being used in other industry sectors as well.

1:14

And shipping is a great example.

1:16

We've been using LNG as a bunkering fuel now

1:19

for several years, and that's really taking off.

1:22

It delivers 23% less emissions

1:25

than very low sulphur fuel oil, for example.

1:27

And we're the number one LNG bunker supplier here in Singapore.

1:30

We recently completed our 200th bunkering activity,

1:34

and that's on the back of our 100th

1:36

only in October of last year, so really rapid growth.

1:40

So LNG for the energy transition

1:43

is an enabler in the very near term,

1:46

helps support reduction and reliance on coal,

1:49

help industries transition as well as power generation.

1:52

But it's also there to support the build out

1:55

and growth of renewables, which is critical

1:57

because gas provides great intermittency support

2:01

for power generation when renewables may not be running.

2:05

I've been in LNG for more than 10 years.

2:07

I think this is the most exciting,

2:09

but yet most competitive time in our industry.

2:12

However, I'm still optimistic about our product.

2:16

Do you share the same optimism?

2:18

I absolutely do,

2:19

and I've been in the industry for at least that time too,

2:24

and it has changed significantly.

2:26

And if I think back to when I first started in LNG

2:29

in the 2000s, I remember being in Qatar

2:33

where we were building the first mega trains for LNG

2:37

and that was the first real wave of supply

2:40

coming to the market in the modern era.

2:43

And we reached about 200 million tonnes in 2010.

2:47

And if you think of where the LNG industry came from,

2:49

today we're celebrating our 65th year in the industry

2:54

and that has come from, you know,

2:57

the first delivery into Canvey Island in the UK,

3:00

so over that time period to get to today.

3:03

And then from here in 2024,

3:07

we're now at 400 million tonnes.

3:09

So it's doubled again in a much shorter period of time.

3:12

And then the same volume coming online

3:14

that's under construction,

3:15

we should reach 600 million tonnes in and around 2030.

3:19

So that's a very significant growth for this industry

3:22

and that's what makes this exciting.

3:25

And for Shell, as our part in this industry,

3:28

we're seeking to grow.

3:29

We're growing by 20 to 30% from our 2022 levels

3:33

through to 2030.

3:35

And that includes somewhere between 15 to 25% in the LNG

3:40

that we purchase as well.

3:41

And so this year, we've had a few good examples

3:44

of our trajectory towards that target.

3:46

We've been working a lot on the acquisition

3:48

of Pavilion Energy within our team,

3:51

and that's adding around 6.5 million tonnes to the business

3:55

once it's been through its regulatory completion.

3:58

It's really complementary to our portfolio

4:01

and particular focus here in Asia with a business

4:04

that's been built over the last 10 years.

4:06

Elsewhere, Shell's joined the Ruwais Project in Abu Dhabi

4:11

and we've taken FID (Final Investment Decision) on the Manatee field

4:13

in Trinidad and Tobago.

4:15

And so those are two really great examples

4:17

from the other part of our integrated gas business

4:20

where we can see our pathway towards that growth.

4:23

You mentioned Pavilion Energy.

4:25

Let's talk about Singapore.

4:27

Natural gas remain the dominant fuel choice for Singapore

4:30

for the foreseeable future.

4:32

LNG is reliable, dependable,

4:35

and lower in emissions to help our energy transition.

4:38

Can you elaborate on the role of Singapore

4:40

as an LNG marketing and trading hub?

4:43

Yes, Singapore's been a really important part

4:46

of our business and for the broader trading

4:48

and supply organisation.

4:49

We have many teams here

4:51

who are helping to manage supply across the region.

4:55

For Singapore itself,

4:57

the LNG business has been now over 10 years in existence

5:02

and I can remember our first cargo delivery back in 2013.

5:07

Since then, we've been delivering reliably

5:09

through what's been, in many cases, a tumultuous time.

5:13

We've seen many market volatilities,

5:16

such things as the COVID-19 pandemic,

5:19

and more recently,

5:20

disruption caused by the Russia-Ukraine conflict.

5:24

But all through this time,

5:26

we've continued to deliver LNG reliably

5:29

so that energy security for Singapore

5:32

is front of mind for us and for all.

5:35

Singapore is in Southeast Asia,

5:37

a key market of growth for LNG for decades to come.

5:40

What greater role can we play?

5:42

Yeah, so the demand growth that we talked about earlier,

5:45

going from the 400 million tonnes today

5:47

to around 650 million tonnes by 2040,

5:51

a very significant part of that comes from Asia.

5:55

And in particular, if we look across India, China,

5:58

and Southeast Asia,

6:00

it accounts for around 78% of that growth.

6:03

So for us here in Singapore,

6:05

the role of LNG in enabling those economies

6:07

and those communities to increase,

6:11

but also to reduce their reliance

6:13

on higher emitting hydrocarbons such as coal,

6:18

is a really important role that we can contribute to.

6:21

Last year, you and the team delivered three firsts,

6:24

which were first cargoes to Philippines,

6:28

where we sold to one of our counterparties

6:31

into a terminal there,

6:33

working together with our Shell Energy team on the ground.

6:36

We also delivered our first cargo

6:38

to Hong Kong back in July last year,

6:40

which is a fantastic achievement and marks the start

6:43

of a long-term relationship for us there.

6:45

And then finally, we delivered the first cargo into Vietnam

6:50

for the commissioning of the terminal there.

6:52

So these seem very simple first steps,

6:55

but there's a lot of work

6:56

that goes into getting to that point

6:58

both, of course, with the counterparty and the terminal,

7:01

but within our team getting ready

7:03

to deliver safely and on time.

7:05

Yes.

7:06

More broadly than that then within Asia,

7:09

we're continuing to focus our efforts on growth

7:12

and capturing that customer demand that we see

7:15

working with counterparties here and also with our suppliers

7:18

and to deliver reliably and affordably to enable that growth

7:22

and that reduction in reliance on coal

7:24

for power and for industry.

7:26

Okay Tom, to inject a bit of fun

7:29

in this serious topic of LNG,

7:31

the team has asked me to pose

7:32

a few rapid fire questions for you.

7:35

Okay.

7:35

Are you ready for the challenge?

7:36

Yeah, let's go.

7:38

Do you like your drink hot or cold?

7:40

It's gotta be hot cup of tea

7:42

first thing in the morning to get me going.

7:44

What's your favourite work destination?

7:46

Well, I love Singapore,

7:48

but beyond that, I'd probably say Santiago in Chile,

7:51

somewhere where we've been delivering LNG

7:53

since the late 2000s,

7:55

and I've had the privilege to visit several times.

7:57

Describe LNG in three words.

7:59

Enabling,

8:00

reliable,

8:02

and affordable.

8:03

If LNG is a superhero, which character would that be?

8:07

I’d go for Jack Frost.

8:09

A super cool

8:10

superhero,

8:11

and

8:11

he had a habit of turning up

8:13

where he was needed, when he was needed

8:15

the most, just like our LNG business,

8:17

that’s what we try to do.

8:19

Thank you very much for speaking to us.

8:20

Thanks so much for having me here.

8:21

It’s been great to be here.