SHELL, Europe’s largest oil company, is considering producing liquefied natural gas from an area in Egypt using a floating liquefaction unit, an Egyptian government official said. The oil major could use floating LNG technology in the north-eastern part of the Mediterranean Sea towards Cyprus, said Omar El Sisi, an official at state-owned Egyptian Natural Gas Holding. However, a Shell spokeswoman told Bloomberg: “We have no comments to make on floating LNG at this point in time.” Shell is known to be examining the application of floating liquefaction technology in other regions, including Australia. The Egyptian government last year announced it would not sign new gas export contracts until 2010, citing price volatility and the need to meet domestic demand. Explorers must set aside a third of gas reserves for domestic use and a third for storage before being allowed to export the rest. The Egyptian government agreed last year to pay more for gas supplied by foreign companies to the domestic market to attract investments in deepwater areas.