Shell pushes ahead with major Canada gas project
ROYAL Dutch Shell is pressing ahead with a major liquefied natural gas (LNG) project in Canada as it looks to take advantage of abundant reserves and a shorter route to Asia.
The oil and gas giant said it had taken a final investment decision on LNG Canada and will begin construction “immediately” on the site, which will be located in Kitimat, British Columbia, on Canada’s west coast.
The first LNG is expected to be extracted from the site “before the middle of the next decade”.
Shell has a 40% stake in the project, with the joint venture shared by Petronas, PetroChina, Mitsubishi Corporation and Korea Gas Corporation.
The company said its share of the capital costs were within its overall investment guidance of between US $25-$30bn a year (£19bn-£23bn).
It added that the project has the advantage of “access to abundant, low-cost natural gas from British Columbia’s vast resources and the relatively short shipping distance to North Asia, which is about 50% shorter than from the US Gulf of Mexico and avoids the Panama Canal”.
Shell’s chief executive Ben van Beurden said: “We believe LNG Canada is the right project, in the right place, at the right time.
“Supplying natural gas over the coming decades will be critical as the world transitions 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.”
Royal Dutch Shell’s B shares were trading higher by around 0.3% in morning trading.