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Shell drops out of Lake Charles LNG proposal

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Given current market conditions, Shell has announced it will not proceed with an equity interest in the proposed Lake Charles LNG project. Accordingly, Energy Transfer will take over as the project developer.

Shell will continue to support Energy Transfer with the ongoing bidding process for the engineering, procurement, and construction contract and then plan a phased handover of the project's remaining activities.

"This decision is consistent with the initiatives we announced last week to preserve cash and reinforce the resilience of our business," said Maarten Wetselaar, Director, Integrated Gas and New Energies, Shell. "Whilst we continue to believe in the long-term viability and advantages of the project, the time is not right for Shell to invest. Through the transition, we will work closely with Energy Transfer."

Lake Charles LNG is a proposed 50/50 project between Shell and Energy Transfer that seeks to convert Energy Transfer's existing import terminal to an LNG export facility in Lake Charles, Louisiana. The project has a proposed liquefaction capacity of 16.45 mtpa for US natural gas export to global customers. In addition to its brownfield advantages and permits, the project has an existing pipeline infrastructure. Shell entered the project in its 2016 combination with BG Group plc.

Shell is reducing its 2020 capital expenditure to $20 billion, or below, from a planned level of around $25 billion, in addition to an operating cost reduction of $3-4 billion over the next 12 months.

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Website:
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