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.

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