Shell told employees March 20 at its Sarnia refinery in Ontario, Canada, that the company has decided to halt any investment in LNG plants for North American vehicles, off-road engines or marine bunkers.
The company had planned to build “mini” LNG plants at Sarnia and also at Geismar, La. – each with 250,000 tonne-per-year capacity. Such plants would be vastly smaller than the giant LNG liquefaction and export plants that Shell has built in the past.
Asked for comment on the announcement, Shell Canada spokesman David Williams told Hart Energy on March 21 that Shell has “paused” development of the “mini-liquefaction” plants for North American transport-fueling customers.
“We’re still interested in exploring this [LNG transportation market] … but in a way that makes value for both Shell and the customer,” Williams said.
“We’ve got many opportunities to invest our dollars and even with [US]$30 billion to $35 billion [per-year capital budget], we’re choice-rich [on capital investments] in North America.”
As noted in a March 20 report from the Sarnia Observer (Canada), Shell last year had announced that Ohio-based Interlake Steamship Company would be its first LNG bunker fuel customer on the Great Lakes. The future of that proposed bunkering scheme is now in doubt.
On a related front, Shell earlier announced that it has decided to cancel an LNG truck refueling network in Australia.
Shell’s new CEO Ben van Beurden, who took over the company January 1, 2014, has been telling stock analysts this year that the entire investment portfolio for Shell is undergoing strategic review.
Shell previously cancelled a proposed 140,000 barrel-per-day gas-to-liquids (GTL) project that would have been built either in Louisiana or Texas. But the estimated $20-billion capex and uncertainty about future U.S. natural gas and oil prices prompted Shell to back off.
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