Royal Dutch Shell Plc, set to become the largest LNG company through the purchase of BG Group Plc, will probably stay focused on building a Canadian shipping terminal, said TransCanada Corp. Chief Executive Officer Russ Girling.
TransCanada, based in Calgary, projects spending more than C$6 billion ($4.8 billion) on gas pipelines to serve Shell’s liquefied natural gas project if it goes ahead. The LNG Canada terminal on Canada’s Pacific Coast is probably still among the Anglo-Dutch company’s top projects after the takeover, Girling said Wednesday.
“Shell has been a major player in West Coast LNG,” Girling said in an interview at Bloomberg’s Toronto office. “Their project at Kitimat is probably one of the best, well- planned, well-thought-out projects.”
LNG Canada is one of more than a dozen proposals to export chilled gas by tanker from Canada to Asia. BG is among proponents that have delayed final decisions on Canadian projects as slumping energy prices trim cash for producers and weaken the LNG industry’s short-term prospects. In a report this week, Moody’s Investors Service said Canadian LNG terminals are unlikely to move ahead amid lower oil prices.
Kirsten Walker, a Vancouver-based spokeswoman for LNG Canada, didn’t immediately respond to an e-mailed request for comment on the Shell acquisition of BG Group.
Canada’s vast supplies of cheap gas make it attractive for producers with a long-term view to proceed with LNG exports, Girling said. Shell is set to make a final decision on LNG Canada by mid-2016 and Malaysia’s Petroliam Nasional Bhd., another proponent of Canadian LNG, is scheduled to decide by mid-2015 whether to proceed on its own project, he said. TransCanada would also build a gas pipeline for the Kuala Lumpur-based company’s Canadian terminal.
The BG takeover announced Wednesday would give Shell twice the LNG sales of its nearest competitor Exxon Mobil Corp.
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