## Shell progressing LNG for North American transportation sector; partnerships with Wärtsilä, Westport, GE

##### 07 September 2011

Shell announced plans to have Liquefied Natural Gas (LNG) available for heavy-duty fleet customers beginning in 2012 at select Shell Flying J truck stops in Alberta, Canada as one of a series of steps to increase the utilization of LNG in the transportation sector in North America.

Shell is pursuing engineering and regulatory permits to produce LNG by 2013 at its Jumping Pound gas processing facility in the foothills of Alberta, Canada. Pending regulatory approval, it will be the first investment of its kind for Shell globally and will include production facilities and downstream infrastructure. Until then, LNG will be supplied to the Shell Flying J truck stops from third-party supply agreements.

With an abundance of natural gas and a growing need for low-emission transportation fuels, today signals a very important step for a significant North American resource. Our strong portfolio and worldwide LNG leadership puts us in a unique position to grow LNG in key markets. And, to meet growing demand, natural gas for larger fleet vehicles delivers reduced emissions and offers a cost-competitive alternative to other fuels.

—Marvin Odum, president, Shell Oil Company

Shell is also actively developing new business opportunities with Original Equipment Manufacturers (OEMs) to substitute LNG for diesel and propane in a number of industrial sectors such marine, on-road trucking, rail, mining and oil and gas drilling applications. Some of these include:

• As part of its efforts to expand the use of LNG as a fuel beyond the heavy duty road transport sector, Shell also today announced a Joint Cooperation Agreement with Wärtsilä North America to further improve the environmental footprint of the US marine industry, as well as other sectors, by accelerating the deployment of larger engines which use LNG as a fuel.

Shell will provide LNG to a broad range of Wärtsilä natural gas powered vessel operators and other customers. Under this agreement, the partners will focus first on the US Gulf Coast, and then expand their efforts.

• Shell and Westport Innovations Inc. will launch a co-marketing program in North America aimed at providing customers a better economic case when purchasing and operating liquefied natural gas-powered vehicles (LNGVs) by consolidating key value chain components such as fuel supply, customer support and comprehensive maintenance into a single, user-friendly package.

Under the terms of the agreement, both companies will leverage their positions in liquefied natural gas (LNG) production and distribution for Shell and LNGV systems and technology for Westport, to deliver a superior integrated commercial solution to participating customers, initially in North America.

Additionally, the companies will collaborate to develop industry standards for LNG as a new transportation fuel.

• A Cooperation Agreement with GE’s transportation division to jointly develop a total solution for railroad including associated infrastructure and a locomotive capable of running on both diesel and LNG. This presents a practical alternative fuel source and delivers the benefits of a secure, low-cost and low-emissions fuel for the rail industry.

• Additionally, in the mining sector, Shell is actively developing energy solutions which utilize liquefied natural gas (LNG) fuel for the North American mining industry. These solutions will bring fuel cost reductions and emissions improvements to the sector through focused applications in the form of mobile mine haul fleets and other stationary applications. Shell is currently collaborating with technical partners to develop LNG infrastructure solutions for the mining customers.

The sidebar today says the China has been profitably producing liquid fuel from coal at a cost of about $60 while crude oil is about$100. DME is very easy to produce from coal and can be used in diesel engines and only requires the same low pressure tanks as propane. DME can also be produced from natural gas. Livio Dante Porta invented the gas producer combustion system for locomotives that doubled the power available from locomotives operating on bad coal. He also improved a simple boiler treatment which gave boilers in such locomotives over twenty years of life. Perhaps a small system could be used in road vehicles. They could use siverado liquid coal. ..HG..