By TONI ELLINGTON
On Wednesday, April 8, 2015, Royal Dutch Shell announced the acquisition of BG Group, a company that is a corporate successor of British Gas, and a leader in global sales of liquefied natural gas (“LNG”). The deal is valued at approximately $70 billion.
The acquisition will position Royal Dutch Shell as the world’s leader in LNG. LNG is formed by turning natural gas or methane into liquid form so that it can be transported by tankers rather than pipelines. This allows the abundant natural gas in the United States to be distributed on a global scale. Because of this acquisition, Royal Dutch Shell will be in a better position to sell large volumes of LNG to China. In its 2014 annual report, BG Group stated that two-thirds of its LNG sales were in the Asia-Pacific region.
LNG is considered to be a better fuel for the environment, because it produces about half as much greenhouse gas as coal when burned. LNG has been touted as a “bridge fuel” between coal and renewable energy sources.
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