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Shell delaying LNG Canada joint venture in northern B.C. | Northern BC Business

Shell delaying LNG Canada joint venture in northern B.C.

Kitimat LNG

From Brent Jang of The Globe and Mail

Royal Dutch Shell PLC says it is delaying the LNG Canada joint venture in northern British Columbia.

Shell chief executive officer Ben van Beurden made the announcement Thursday as the company released its financial results. Shell’s fourth-quarter profit slid 56 per cent to $1.8-billion (U.S.).

Analysts had expected the LNG consortium to make a final investment decision (FID) in the spring of 2016 on whether to invest up to $40-billion (Canadian) on construction.

Through Shell Canada, the company owns 50 per cent of LNG Canada. PetroChina Co. Ltd. holds a 20-per-cent stake while the other Asian partners are Japan’s Mitsubishi Corp. and South Korea’s Korea Gas Corp., which each have a 15-per-cent interest.

“The LNG Canada joint venture partners have agreed that due to market conditions, it makes sense to shift the FID decision to late 2016. In the meantime, the joint venture will continue to work on the competitiveness of the project,” Shell Canada spokeswoman Tara Lemay said in a statement.

Vancouver-based LNG Canada issued a separate statement. “We have always stated that our Joint Venture Participants plan to make a final investment decision in 2016. We are pleased, given the current oil and LNG prices, and turmoil in global energy markets, that the Joint Venture Participants in LNG Canada are still working towards a final investment decision for the proposed facility later this year,” LNG Canada CEO Andy Calitz said.

LNG Canada’s proposed export terminal in Kitimat is slated to be on the site of a methanol plant closed in 2006 by Methanex Corp., while the planned dock for LNG tankers is a wharf that formerly belonged to the Eurocan pulp and paper mill that West Fraser Timber Co. Ltd. shut down in 2010.

LNG Canada’s industrial property is on the northern end of Douglas Channel, where tankers would be filled with the fuel destined for customers in Asia.

Last summer, the Shell-led group cleared the main regulatory review hurdles, obtaining approval from the B.C. Environmental Assessment Office and also receiving the go-ahead from the Canadian Environmental Assessment Agency. In 2013, the B.C. office and CEAA agreed to an expedited process called “substitution,” designed to reduce unnecessary duplication.

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/shell-delaying-lng-canada-joint-venture-in-northern-bc/article28551269/

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