SVW Seven Group Holdings Limited

By Rhiannon Hoyle

Shell PLC and Australia's Seven Group Holdings Ltd. have approved the development of the Crux natural-gas field off the coast of western Australia, Shell said on Monday.

The oil major expects gas from Crux to be in demand as traditionally coal-hungry Asian utilities diversify their energy mix and customers globally wean themselves off Russian energy resources following Moscow's invasion of Ukraine.

The project will "boost our customers' security of supply, which is becoming an ever more significant consideration for global consumers," said Wael Sawan, the head of Shell's integrated gas business.

The joint venture will start construction on the project this year and expects to be producing gas in 2027, Shell said.

An export pipeline will be connected to the existing Prelude floating liquefied natural gas facility roughly 100 miles southwest of the field. Crux will have the capacity to supply Prelude with up to 550 million standard cubic feet of gas a day.

The development is expected to cost about $2.5 billion, commodities consultancy Wood Mackenzie said.

"In a global context, Crux is an example of the type of incremental, shorter-cycle, high-return development that the industry is targeting as it maintains capital discipline despite strengthening commodity prices," Wood Mackenzie research analyst Michael Song said.

Supplies from the field will feed rising Asian gas demand, supporting coal-to-gas switching, but will come to market later this decade at a time when global supplies are likely to be rising sharply because of other developments in places including Qatar, the U.S. and Canada, he said.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

May 30, 2022 00:32 ET (04:32 GMT)

Seven (ASX:SVW)
Historical Stock Chart
From Nov 2024 to Dec 2024

Seven (ASX:SVW)
Historical Stock Chart
From Dec 2023 to Dec 2024