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Shell mega-deal could mean one fewer LNG facility for BC

Energy industry analysts say Royal Dutch Shell’s blockbuster deal to buy Britain’s BG Group could mean one fewer LNG development on the North Coast.

Shell and BG are both major players in liquefied natural gas and both have projects on the books for northern BC.

Shell is leading a consortium of companies developing the Kitimat-based LNG Canada project which could cost up to $40 billion. BG Group has been developing the Prince Rupert LNG project, although it announced in October that it would be delaying its final investment decision beyond 2016.

Industry watchers say the deal would render the Prince Rupert project redundant as it is unlikely Shell would build two multi-billion dollar projects on the west coast.

Alan Ross, a lawyer at Calgary-based Borden Ladner Gervais says Shell may want to consolidate its LNG assets once it takes over BG.

Shell’s $70 billion (US) deal to buy BG is expected to close in 2016.

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