Shell Canada Energy, an affiliate of Royal Dutch Shell, has given the green light to invest in LNG Canada, a major project in Kitimat, British Columbia.
With LNG Canada’s joint venture participants also having taken FID, construction will start immediately with first LNG expected before the middle of the next decade.
Shell’s 40% share of the project’s capital cost is within the company’s current overall capital investment guidance of $25-$30bn per year.
LNG Canada is a long life asset that will initially export LNG from two processing units or “trains” totalling 14 million tonnes per annum (mtpa), with the potential to expand to four trains in the future. It is advantaged by 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. The LNG export facility will be constructed using proven industry technology on a large, partially developed industrial site with an existing deep-water port, roads, rail and power supplies.
The project has been designed to achieve the lowest carbon intensity of any LNG project in operation today, aided by the partial use of hydropower.
Ben van Beurden, Chief Executive Officer, Royal Dutch Shell, said: “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.”
“We believe LNG Canada is an attractive investment opportunity in a strong joint venture, with companies that have deep LNG industry experience,” said Maarten Wetselaar, Integrated Gas and New Energies Director, Royal Dutch Shell. “In the last two years, LNG Canada has improved its competitiveness, reduced execution uncertainty and gained significant stakeholder support. Together with our joint venture participants and contractors, we look forward to working with the local community, First Nations, government and the LNG Canada team to build and operate this game changing project for Canada’s energy industry.”
For more information visit: www.shell.com
2nd October 2018
