The LNG Canada Joint Venture (JV) announced today it has decided to delay the final investment decision (FID) on the Canada LNG project.
The JV participants, which include Royal Dutch Shell, Petrochina, Mitsubishi Corporation and Kogas, determined they need more time before taking the FID, but did not confirm when this decision will be made.
“Our project has benefitted from the overwhelming support of the BC (British Columbia) Government, First Nations – in particular the Haisla, and the Kitimat community. We could not have advanced the project thus far without it,” LNG Canada CEO Andy Calitz, said.
LNG Canada Delays FID
The decision was justified by the current challenges in the global industry, including capital constraints. The FID was planned for the end of 2016.
“I can’t say enough about how valuable this support has been and how important it will be as we look at a range of options to move the project forward towards a positive FID by the Joint Venture participants,” Calitz added.
According to a statement issued by Shell, the project remains a “promising opportunity” and has already achieved “critical regulatory approvals”.
Additionally, it already has commercial and engineering contracts in place to design and build the project, as well as the environmental approvals required for the pipeline’s right-of-way.
Uncertain Future For LNG Canada
“Through their efforts to build a strong LNG sector for Canada, and a critical, cleaner energy alternative for the world, the governments of British Columbia and Canada have developed sound fiscal and regulatory frameworks for success,” the statement reads.
LNG Canada is now expected to go on with preparation activities and work on the new proposed date for the FID.
Earlier this year, and right after it had secured a permit for its planned terminal, Shell had announced it was putting the FID on hold due to the slump in oil and gas prices.
The 550,000 tonne per year venture will use a floating LNG vessel (FLNG) to tap offshore gas.
Shell is the main stakeholder in the project (50%), with PetroChina (20%), Mitsubishi (15%) and Kogas (15%).
Shell Canada LNG Video