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Shell is
Photo:
yves herman / Reuters
LONDON-
Royal Dutch Shell
PLC announced Tuesday that it is continuing its work with a major Canadian liquefied natural gas project, ending years behind schedule and signaling a renewed appetite for new developments in the export of gas. LNG.
The decision to continue the project by 14 million tonnes a year reflects the growing confidence in global gas markets, as growing demand reduces the threat of new supplies entering the market causing an overabundance. This marks the end of a seven-year effort, shattered by the low prices that delayed the project's final investment decision by two years.
The project is designed to send gas from Canada, where prices are relatively low, to centers of demand in Asia, where it can earn a premium. It benefits from its location: the delivery distance between Canada and Northeast Asia is about 50% shorter than that of the Gulf of Mexico and avoids the Panama Canal.
Shell said the construction of the project would begin immediately, and that production should begin before the mid-2020s. The oil and gas giant expects the project's start to be in short supply. in LNG, rapidly growing demand absorbing large volumes of new production. He said the project is expected to generate an internal rate of return of about 13%.
Shell holds the largest share of LNG Canada with 40%, alongside partners
PetroChina
,
Mitsubishi
Corp.
,
Korea gas
Corp.
and the Petroliam Nasional Bhd of Malaysia.
The Anglo-Dutch oil company relies heavily on natural gas, anticipating strong growth in demand in the coming years. The company's acquisition of the BG Group in 2016 for approximately $ 50 billion has enabled it to become the largest non-state-sponsored player in the LNG market in the world.
Write to Sarah Kent at [email protected]
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