logo-loader

Shell’s major LNG Canada project gets go-ahead

Published: 07:47 02 Oct 2018 BST

oil and gas operations
It promises to open a shorter export route to North Asia

Royal Dutch Shell Plc (LON:RDSB) has given the go-ahead for a major long-life liquefied natural gas (LNG) project in Canada, where the first production will now be expected by ‘the middle of the next decade’.

LNG Canada, located in Kitimat, will be developed into a 14mln tonne per annum operation, based initially on two LNG processing units (often referred to as ‘trains’), unlocking vast gas resources in British Columbia for markets in North Asia.

Shell highlighted that such an export route is short – about half the distance – compared to shipping gas to those end markets from the Gulf of Mexico via the Panama Canal.

READ: Shell downgraded after below par results

The London-listed ‘super-major’ is the largest stakeholder in the venture with 40%; alongside partners Petronas (25%), PetroChina (15%), the Mitsubishi Corporation (15%) and the Korea Gas Corporation (5%).

It is a substantial undertaking, though Shell expects its share of project capital costs will be covered within its current investment budget which stands at US$25-40bn per year.

Ben van Beurden, Shell chief executive, described it as “the right project, in the right place, at the right time” and highlighted the critical that Shell expects LNG to play in the world’s transition to a lower carbon energy system.

“Global LNG demand is expected to double by 2035 compared with today, with much of this growth coming from Asia where gas displaces coal.

“LNG Canada is well positioned to help Shell meet the growing needs of customers at a time when we see an LNG supply shortage in our outlook.

“With significant integration advantages from the upstream through to trading, LNG Canada is expected to deliver Shell an integrated internal rate of return of some 13%, while the cash flow it generates is expected to be significant, long life and resilient.”

Oriole Resources outlines 2023 achievements and future exploration plans

Oriole Resources PLC (AIM:ORR) CEO Tim Livesey and chief financial officer Bob Smeeton join Proactive's Stephen Gunnion with details of the company's 2023 financial and operational performance. Livesey highlighted successful exploration programs in Cameroon, at the Bibemi and Mbe projects,...

38 minutes ago