Shell & partners to invest $31 bln in LNG Canada project

Oil and gas major Royal Dutch Shell and its four partners in LNG Canada project plan to announce a final investment decision to develop the C$40 billion ($31 billion) the gas export project, a joint venture company comprised of five energy companies.

Two of Shell's partners, PetroChina and Korea Gas, announced approvals of their share of the investment last Friday. The other two partners are Malaysia's Petronas and Japan's Mitsubishi.

The project could foreshadow a new wave of investments for major gas export projects after a three-year hiatus forced by a global supply glut. LNG Canada would be able to send cargoes from Kitimat, British Columbia, to Tokyo in about eight days compared to 20 days from the U.S. Gulf of Mexico.

The investment approval is only for an initial two LNG trains of 13 million tons per year, but if built, the chances that LNG Canada would double capacity in a second phase is all but an inevitability due to the economies of scale.