By Katherine Blunt

Shell approves massive LNG project

Royal Dutch Shell said it would move forward with its investment in LNG Canada, a liquefied natural gas export terminal in northern British Columbia slated to serve growing demand in Asia.

The project, a joint venture with Malaysia's Petronas, China's Petrochina, South Korea's Kogas and Tokyo-based Mitsubishi Corp., is the first in Canada to reach a final investment decision at a time when the industry is growing rapidly along the U.S. Gulf Coast. Construction is expected to start immediately.

The project will liquefy and export natural gas from British Columbia, which has substantial shale reserves. Shell said in a statement that the terminal's proximity to northern Asia will allow it to compete with companies shipping LNG to Asia from the Gulf of Mexico via the Panama Canal.

China, South Korea, India and other Asian nations are fueling demand for LNG as they work to reduce air pollution by shifting from coal to cleaner-burning natural gas.

“Supplying natural gas over the coming decades will be critical as the world transitions to a lower carbon energy system,” Shell CEO Ben van Beurden said in a statement.

The project is one of the largest in years to receive a green light from investors. Research firm Wood Mackenzie pegged initial costs at about $18 billion, excluding the cost of a pipeline to feed the facility.

“It seems that megaprojects are back,” said Dulles Wang, the firm's director of North America gas.

Shell is the largest investor in the project with a 40 percent stake. Petronas, Malaysia's state-owned oil and gas company, holds a 25 percent stake.