"We are always looking for commercial opportunities to take advantage of the expansion," he said. Shell's growth strategy includes the acquisition of assets and proposing new liquefied natural gas (LNG) projects for backing from local governments, Assunçao said, declining to give details or potential investment figures.
Among projects Shell believes are feasible are natural gas liquefaction and re-gasification plants to allow the region to import LNG from overseas or export it to the US.
High gas demand in the region, especially in Brazil, will be driven by power generation as economic growth is expected to continue in the coming years, Assunção said.
In Brazil gas-fired generation is expected to grow to complement its predominantly hydroelectric power generation system. As a result, gas consumption could reach 100 million cubic meters a day (Mm3/d) by 2010 from current levels of 41Mm3/d, Assunção said.
Shell's gas and power presence in the region currently ranges from participation in the gas transport company Transredes in Bolivia, an interest in the Brazil-Bolivia gas pipeline TBG, a stake in the 480MW Cuiabá gas-fired power plant and a minority stake in Brazil's largest gas distribution company Comgás, which sells about 12Mm3/d.
Although there are enough gas reserves in the Southern Cone to meet Brazil's gas demand in the next few years, Shell has decided to invest more in E&P in that country, particularly offshore. In Brazil's seventh exploration licensing round Shell was awarded interests in five exploration blocks in the Santos basin likely to contain natural gas reserves.
Shell is the only company in Brazil apart from federal energy company Petrobras (NYSE:REP) currently producing oil as an operator.
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