Royal Dutch Shell is moving away from growing its liquefied natural gas business, a move that raises new doubts about the future of its proposed LNG Canada project in Kitimat, B.C.
On Tuesday, the company said the pace of new investment in LNG will slow as it moderates growth and prioritises cash flow generation and returns on existing projects.
Shell said while its integrated gas business was previously a “growth priority,” it has now reached a critical mass the February acquisition of gas giant BG Group in February.
Oil and gas analyst Dirk Lever from Altacorp Capital said the announcement doesn’t mean an end to the company’s LNG Canada project.
“They may just kick the can down the road, but it’s not dead”, he commented.
The LNG Canada project would export up to 24 million tonnes of LNG per year. The Prince Rupert project was designed to export up to 21 million tonnes of LNG ever year.
Shell owns a 50 percent stake in the LNG Canada project it is developing with partners Korea Gas Corp., Mitsubishi Corp. and PetroChina Co. Ltd. Shell now owns 100 percent of the Prince Rupert project following the BG merger.
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Source: [The Star]