Bloomberg are reporting that Royal Dutch Shell Plc has announced that it has not written off its Canadian LNG project in Kitimat, British Columbia, yet as a global supply glut killed off a competing project.
LNG Canada, which is also backed by Mitsubishi Corp., PetroChina Co. and Korea Gas Corp., is still weighing an investment decision that is expected by early 2019.
"We need to get the timing properly right – we think we can," Shell’s Chief Executive Officer Ben Van Beurden said. "If we look at an investment decision in the next 18 months or so, this is going to be a project that could start producing right at the moment when the spot market, the short-term market is getting very tight again."
The announcement follows the cancellation of a US$27 billion LNG project in the same region on the northern British Columbia coast by Malaysia’s Petroliam Nasional Bhd earlier this week – the latest casualty in a growing list of projects quashed in recent months. Plummeting prices have thrown the economics of export terminals from Russia to Mozambique into question as increasing volumes of gas from Australia and America’s shale formations hit the water, inundating the market with so much supply that analysts say demand may not catch up until the next decade.
Shell and its partners had in July 2016 delayed for the second time a decision on their LNG Canada project, which aims to export fuel to Asian markets, citing global industry challenges and capital constraints.
More than two-thirds of the LNG terminals proposed to come online in the mid-2020s probably will not get built.
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