December 22, 2010 / 5:33 PM / in 8 years

Shell says appraising Libya gas discovery

Customers fuel up at a Shell gas station in Westminster, Colorado October 30, 2008. REUTERS/Rick Wilking

TRIPOLI (Reuters) - Royal Dutch Shell has found natural gas on its concession in Libya’s Sirte basin and will continue exploratory drilling to establish if reserves there are commercial, a company official told Reuters.

Shell signed a deal with the Libyan government in 2005 to explore and develop five areas in the Sirte basin, as well as to upgrade a liquefied natural gas (LNG) plant at Marsa Al-Brega, on Libya’s Mediterranean coast.

“We found some gas but we are still drilling,” Nureddin Wafati, an official with Shell Exploration and Production Libya, told Reuters in an interview. “We hope it will become commercial.”

The company began exploratory drilling on that concession last year, said Wafati. He did not give any details about the gas reserves found so far.

He said if the project starts producing commercial quantities of gas, Shell had the option of shipping it to Marsa Al-Brega for export as LNG, or supplying it for power generation inside Libya.

Shell was one of the first energy majors to sign an exploration deal with Libya after international sanctions were lifted on the country in 2004.

Malcolm Brinded, Shell’s Executive Director for Upstream International business, was in the Libyan capital last week for talks with officials from the NOC state energy firm.

Wafati did not give details of what was discussed.

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