Shell CEO: LNG Canada construction “a bit behind”

The Shell-led LNG Canada development is slightly behind with construction works due to disruptions caused by the Covid-19 pandemic, CEO Ben van Beurden said last week.

“We are a bit behind the construction on site,” van Beurden told analysts on Thursday during Shell’s fourth-quarter earnings call.

“The overall project, though, is in the sort of percentage points behind. So it is not single digits, low single-digit percentage points,” he said.

To remind, Fluor and partner JGC hold the engineering, procurement and construction contract on the LNG export project worth more than $30 billion.

Following the FID by Shell and partners back in October 2018, the duo started working at the project site in Kitimat.

The two firms continued to perform works until March last year when they had to downsize the workforce by half due to the pandemic.

Fluor said in October last year total project progress had reached about 27.5 percent saying that the project was behind because of the pandemic.

In addition, LNG Canada and the contractors announced early January a gradual return to construction activities at the project site, following a considerable holiday workforce reduction in December.

British Columbia also recently said it has extended a state of emergency because of the pandemic until February 16.

“Going reasonable”

Despite all these setbacks, van Beurden said LNG Canada “is going reasonable, considering the fact that, of course, it’s a large, complex project.”

“I do believe we have been able to keep pace with that project, largely, of course, because many of the construction takes place in Chinese yards at this point in time, and they are back up and running again,” van Beurden said.

The CEO did not provide any additional information regarding the delays, but LNG Canada said last year these would not affect the first LNG shipment expected in the middle of the decade.

The giant project includes the construction of 14 million tonnes per annum (mtpa) export capacity from the first two trains, with the potential to expand to four trains in the future.

Besides Shell, LNG Canada partners include Malaysia’s Petronas, PetroChina, Japan’s Mitsubishi Corporation and Kogas of South Korea.

Most Popular

K Line, Petronas name LNG carrier duo in China

Chinese shipbuilder Hudong-Zhonghua has hosted a naming ceremony for two 174,000-cbm liquefied natural gas (LNG) carriers it built for Japan’s K Line and Malaysia’s Petronas.

US weekly LNG exports reach 32 shipments

US liquefied natural gas (LNG) plants sent 32 cargoes during the week ending September 2, up one shipment from the week before, according to the Energy Information Administration.

Atlantic spot LNG rates rise for first time in seven weeks

Atlantic spot LNG shipping rates rose for the first time in seven weeks, rising $3,750 week-on-week to $15,500 per day, according to Spark Commodities.

More News Like This

Peru LNG sent five shipments in August

Peru LNG’s liquefaction plant at Pampa Melchorita shipped five liquefied natural gas cargoes in July, the same as in the previous three months, according to shipment data by state-owned Perupetro.

Shell wraps up $16.5 billion ARC acquisition

UK-based LNG giant Shell has completed its previously announced acquisition of Canadian gas producer ARC Resources for $16.5 billion, including debt, after receiving all required shareholder, court, and regulatory approvals.

Wison strengthens its FLNG offering with Shell deal

Chinese FLNG builder Wison New Energies has signed a collaboration agreement to integrate Shell’s liquefaction technology into its floating...

Shell, partners take FID on new project to deliver more gas to Egypt

Egypt, which has turned to LNG imports over the last two years to cover domestic natural gas shortages, will receive more much-needed gas supplies after UK-based LNG giant Shell and its partners took a final investment decision on the Phase 12a development project in the West Delta Deep Marine (WDDM) concession.