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

Venture Global’s Plaquemines LNG terminal achieves first production

Venture Global announced on Friday it had reached first LNG production at the company’s second facility, Plaquemines LNG, in...

Spot LNG rates remain weak

“Spark30S rates rose for a fourth consecutive week, increasing marginally by $750 to $23,500 per day,” Qasim Afghan, Spark’s commercial...

Swan Energy, Nebula’s AG&P LNG plan Indian JV

Swan Energy said on Friday it had signed a heads of agreement with AG&P Terminals &Logistics (Singapore). The two firms...

More News Like This

YPF, Shell seal Argentina LNG deal

YPF president and CEO Horacio Marin, and Shell's executive VP of LNG, Cederic Cremers,signed the deal in The Hague,...

Chevron-led JV secures GHG permit near Barrow Island

US energy giant Chevron and its partners Shell and ExxonMobil have been awarded the greenhouse gas (GHG) assessment permit...

Shell’s LNG Canada names new CEO

Cooper, currently LNG Canada’s senior vice president for Phase 1 pipeline and expansion will succeed Jason Klein as president...

Peru LNG terminal sent six cargoes in November

According to the shipment data by state-owned Perupetro, during November, the 4.4 mtpa LNG plant sent two shipments each...