Anglo-Dutch energy giant Royal Dutch Shell will stop its liquefied natural gas project (LNG) in the state of Louisiana “given current market conditions“, the company announced.
In a statement on Monday, Shell said Energy Transfer will take over the whole share of Lake Charles LNG project.
According to Shell, Lake Charles LNG is a proposed 50/50 project between Shell and Energy Transfer that seeks to convert Energy Transfer’s existing import terminal to an LNG export facility in Lake Charles, Louisiana.
The project has a proposed liquefaction capacity of 16.45 mtpa for US natural gas export to global customers. In addition to its brownfield advantages and permits, the project has an existing pipeline infrastructure. Shell entered the project in its 2016 combination with BG Group.
The company said it will continue to support Energy Transfer with the ongoing bidding process for the engineering, procurement, and construction contract and then plan a phased handover of the project’s remaining activities.
“This decision is consistent with the initiatives we announced last week to preserve cash and reinforce the resilience of our business,” Maarten Wetselaar, the integrated gas and new energies director at Shell, was quoted as saying in the statement.
“Whilst we continue to believe in the long-term viability and advantages of the project, the time is not right for Shell to invest. Through the transition, we will work closely with Energy Transfer,” he added.
By Sibel Morrow