Shell said today that it had taken a final investment decision (FID) on LNG Canada, a major liquified natural gas (LNG) project in Kitimat, British Columbia.
Construction will start immediately with first LNG expected before the middle of the next decade.
LNG Canada is a long life asset that will initially export LNG from two processing units or “trains” totaling 14 million tonnes per annum (mtpa), with the potential to expand to four trains in the future.
Shell’s 40% share of the project’s capital cost is within the company’s current overall capital investment guidance of £19-£23 billion per year.
Shell chief executive Ben van Beurden said: “We believe LNG Canada is the right project, in the right place, at the right time.
“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.
“LNG Canada is well positioned to help Shell meet the growing needs of customers at a time when we see an LNG supply shortage in our outlook.
“With significant integration advantages from the upstream through to trading, LNG Canada is expected to deliver Shell an integrated internal rate of return of some 13%, while the cash flow it generates is expected to be significant, long life and resilient.”
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