Energy Voice | Shell moves ahead with £23bn LNG project

Royal Dutch Shell Plc’s Chinese partner in a liquefied natural gas venture in western Canada approved its share of the investment, pushing the C$40 billion ($31 billion) development one step closer to a final approval.

The board of PetroChina Co., the nation’s largest oil and gas company, approved its $3.46 billion share of the LNG Canada project, the company said in a filing to the Hong Kong stock exchange Friday.

The Beijing-based company holds 15 percent of the development. All the partners, including Malaysia’s Petroliam Nasional Bhd, Japan’s Mitsubishi Corp. and Korea Gas Corp., need to make similar moves for the venture to approve a final investment decision. Shell didn’t immediately respond to requests for comment.

“PetroChina’s board approving their portion of funding for the project is a clear sign that the project is sprinting toward FID now,” Bloomberg NEF analyst Fauziah Marzuki said by email.

LNG Canada would be Canada’s largest-ever infrastructure project. With the capacity to eventually export as much as 26 millions tons per year, primarily to Asia, it would also be the biggest new LNG terminal to be sanctioned in years.

The decision may be the start of a wave of investments for major gas export projects after a supply glut and a price collapse forced the three-year hiatus. Booming demand growth means that 11 projects, including LNG Canada, are likely to receive final investment decisions by the end of 2019, according to BNEF.

Shell and its partners are set to announce an FID on the project as soon as next week, Bloomberg News reported Wednesday. Preparations for an Oct. 5 announcement followed by an LNG Canada event at a local golf club the next day are underway in Kitimat, British Columbia, the site of the proposed project, said people with direct knowledge of the activities, who asked not to be identified.

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