Connect with us

Hi, what are you looking for?

Business

Kitimat LNG project suffers setback as Shell posts earnings drop

On Thursday, Royal Dutch Shell announced it was postponing its decision on the $40 billion liquefied natural gas export project in Kitimat, B.C. “likely” until the end of this year.

The announcement comes after Shell released its 2015 fourth-quarter figures, which showed a 44 percent slump in earnings. The Financial Post is saying Shell is not alone in reining in its spending due to the severe oil and gas crash. However, the Dutch company is also plagued with worry over a $70 billion acquisition of rival BG Group Plc, which is supposed to be completed by the end of this month.

“Operating costs and capital investment have been reduced by a total of $12.5 billion as compared to 2014, and we expect further reductions in 2016,” said Shell CEO Ben van Beurden. Shell owns a 50 percent share of LNG Canada.

The Kitimat export terminal is supposed to be constructed on industrial property at the northern end of Douglas Channel.

Other stakeholders in the project include PetroChina Co. Ltd. with a 20 percent stake while the other Asian partners are Japan’s Mitsubishi Corp. and South Korea’s Korea Gas Corp., each with a 15 percent interest.

CBC News Canada asked LNG Canada for an interview and they responded with a statement: “We have always stated that our Joint Venture Participants plan to make a Final Investment Decision in 2016,” wrote Andy Calitz, CEO of LNG Canada. “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.”
Premier Christie Clark is remaining optimistic about the setback, saying it was good news to hear that Shell was just postponing its investment decision until the end of the year, reports the Vancouver Sun.

“To me the good news is that when you see energy projects getting canceled all over the world Shell Canada, LNG Canada announced that they are recommitting to the project in British Columbia,” said Clark. “The dates changed, but their commitment to it hasn’t.”

Shell has responded to the energy crisis by slashing billions of dollars in spending, as well as reducing its global workforce by 10,000 employees. It is going to be interesting to see what happens with its $70 billion acquisition of the BG Group Plc in a few weeks.

Avatar photo
Written By

We are deeply saddened to announce the passing of our dear friend Karen Graham, who served as Editor-at-Large at Digital Journal. She was 78 years old. Karen's view of what is happening in our world was colored by her love of history and how the past influences events taking place today. Her belief in humankind's part in the care of the planet and our environment has led her to focus on the need for action in dealing with climate change. It was said by Geoffrey C. Ward, "Journalism is merely history's first draft." Everyone who writes about what is happening today is indeed, writing a small part of our history.

You may also like:

World

Immigration is a symptom of a much deeper worldwide problem.

Business

Saudi Aramco President & CEO Amin Nasser speaks during the CERAWeek oil summit in Houston, Texas - Copyright AFP Mark FelixPointing to the still...

Business

A recent article in the Wall Street Journal infers that some workers might be falling out of the job market altogether.

Business

Traveling in NY is already costly, but it just got worse: transit authorities have approved a controversial $15 toll, set to take effect in...