Thursday, February 4, 2016

Shell postpones final decision on Kitimat's LNG Canada project

Plans for a Kitimat LNG Terminal
are on hold as Shell cuts costs

(photo from LNG Canada website)
The unsettled economics of the world energy industry has once again left a Northwest LNG project in pause mode, with Shell announcing today that they will be postponing their decision on the proposed LNG Canada project for Kitimat, as well as a number of other international projects that they had in planning.

As part of a fourth quarter financial report that outlined an earnings plunge of 44 per cent, the Anglo Dutch energy company noted that operating costs and capital investment across the companies components had been reduced by a total of 12.5 billion dollars, with further reductions anticipated in 2016.

In a statement that was part of the fourth quarter dividend announcement, Shell CEO Ben Van Beurden noted that the times were challenging for the industry, and the company was responding with urgency and determination, but also with great sense of excitement for the future.

Where the LNG Canada project might fit into that future wasn't included as part of the CEO's presentation, as no timeline was provided as to when Shell might reconsider the Kitimat project for a final decision.

The statement from Shell can be reviewed here, while a video comment from Shell Chairman can be viewed here.

Last week the company completed a mega merger with BG Gas, a 52 billion dollar transaction that will be complete by February 15th.

Prior to the that merger, BG Gas had been proposing its own LNG Terminal for Prince Rupert's Ridley Island, however there has not been much information to be found on that project since BG became more closely aligned with Shell.

The LNG Canada project had most recently celebrated the receipt of a LNG Facility permit from the BC Oil and Gas Commission, calling it a critical milestone in the plans to move their project forward.

Some of the items of note on today's announcement from Shell can be found below, we shall update the files as more items become available:

Shell postpones decision on LNG project in Kitimat due to profits slump
Shell postpones LNG Canada FID as 205 profits slump
Shell postpones decision on Kitimat LNG project after profits fall
Shell delaying LNG Canada joint venture in northern B. C.
Setback for Kitimat LNG as Shell postpones investment decision
Shell postpones final investment decision on Kitimat LNG project
Shell Delays Canada Gas Export plans Hampered by Crude Slump
Shell delays final decision on LNG export project planned for Kitimat
Shell delays final Kitimat LNG investment (video)
LNG Canada delay marks new blow to B.C. hopes
Shell's B. C. LNG delay is no surprise
LNG Canada delays plans for Kitimat Terminal project (video)

Some of the past history of the proposed LNG Canada project can be found on our archive page.

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