Shell postpones decision on LNG project in Kitimat due to profits slump
Shell has announced it is postponing a final decision on the Shell-led LNG Canada export project in Kitimat due to slumping profits.
Shell reported on Thursday a 44 per cent drop in profit in the final three months of last year, forcing a reevaluation of spending decisions.
“Operating costs and capital investment [across Shell] have been reduced by a total of $12.5bn as compared to 2014, and we expect further reductions in 2016,” CEO Ben van Beurden said in a statement.
The project received environmental approval from the federal and provincial governments last June, although the approval came with a number of conditions.
Shell owns a 50 per cent stake in the LNG Canada project and could have started construction by 2021 or 2022.
LNG Canada expected 7,500 workers would be employed during peak construction at the Kitimat site and an estimated $8 billion would be spent on goods and services within Canada, including $3 billion in B.C.
The other shares are held by Japanese trading company Mitsubishi, South Korean incumbent KOGAS and China state-run Petrochina.
-With files from The Canadian Press
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