Shell has confirmed that it is unlikely to approve development of the Arrow LNG (liquefied natural gas) project this year, as the company announced it would delay making any major financial investment decisions in 2014.
The US$ 10 billion Arrow Energy LNG project was initially scheduled to be approved late in 2013, and while Shell says the facility is still in the pipeline, it will remain on hold for the time being.
CEO Ben van Beurden commented: “We recently […] postponed the final investment decision on the Arrow LNG project in Australia. We didn’t like the economic and inflation risks on these proposals.
“We’re not expected any major financial investment decisions in Asia Pacific LNG in 2014,” he added.
According to van Beurden, Shell’s Australian assets remained an important part of its global portfolio including the Prelude floating LNG project, the Sunrise LNG project and the Chevron-operated Wheatstone project.
However he explained the company would need to make “hard choices in our worldwide portfolio to improve Shell's capital efficiency.”
"Shell's focus in LNG is to […] be capital efficient in progressing the next wave of LNG options - Abadi, Canada LNG, Browse, and Arrow," van Beurden said.
The company also confirmed it would look to sell non-core assets as it prioritises growth plans.
"The company will increase the pace of asset sales, which are expected to be US$ 15 billion for 2014 and 2015 combined in upstream and downstream,’ van Beurden confirmed.
Edited from various sources by Katie Woodward
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