Anglo-Dutch energy giant Shell and its partners have finally given the green light to an enormous liquified natural gas project in Canada. Shell has a 40% interest in LNG Canada and the remaining shares are held by Malaysia’s Petroliam Nasional, Mitsubishi, PetroChina and Korea Gas. Construction will start immediately, with the first LNG expected before the middle of the next decade, Shell said. ‘We believe LNG Canada is the right project, in the right place, at the right time,’ said Shell’s chief executive Ben van Beurden. ‘Supplying natural gas over the coming decades will be critical as the world transitions to a lower carbon energy system.’ LNG Canada is expected to deliver Shell an integrated internal rate of return of some 13%, while the cash flow it generates is expected to be ‘significant, long life and resilient,’ Van Beurden said.

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6 Comments on "Shell agrees to massive Canadian liquified natural gas project"

Roger on Tue, 2nd Oct 2018 7:51 pm 



13 percent IRR…that’s pathetic by anyone’s standard.

rockman on Wed, 3rd Oct 2018 12:17 pm 



Roger – “13 percent IRR…that’s pathetic by anyone’s standard.” Obviously you’re not at all familiar with the typical historic IRR most petroleum companies have made. Many have been satisfied making 8% to 10%.

jawagord on Wed, 3rd Oct 2018 1:39 pm 



I know nothing about IRR, but this LNG plant is going to operate for 40-50 years given the gas reserves in Western Canada and I imagine there will be some very good cash flow years ahead along with Phase 2 expansion which will piggy back on the Phase 1 infrastructure.

Anonymous on Wed, 3rd Oct 2018 5:13 pm 



What Rockman said. Just think if you could get 13% for your money in a bank account. Now, of course equities have higher risk than bank deposits so you expect a higher return. But still 8-10% is a reasonable WACC (look it up) for a chemicals or oil company. Nothing wrong with 13% for this project.

Bloomer on Wed, 3rd Oct 2018 11:22 pm 



If Asia can wean it’s self off of coal and switch to natural gas that’s a good start in reducing carbon emissions. Meanwhile in the States coal is great again as is mountain top mining.

makati1 on Thu, 4th Oct 2018 12:17 am 



I wonder if it will ever get finished, after the financial crash> I doubt it. Dreams of future wealth by the lazy and ignorant. LOL