Shell CEO Considers New Natural Gas Bet

SEATTLE (Oil Monster): Shortly after Ben van Beurden took over as chief executive of Royal Dutch Shell PLC, he bet the company on natural gas, with a roughly $50 billion takeover of a rival focused on shipping the fuel around the globe. Now he is preparing to double down.

Mr. van Beurden said Tuesday that a consortium led by the Anglo-Dutch energy giant will decide before year-end whether to move forward with a $30 billion, liquefied-natural-gas export terminal in western Canada.

“We postponed the decision previously when the project wasn’t ready in terms of economic fortunes,” he told The Wall Street Journal on the sidelines of the Oil and Gas Climate Initiative’s meeting in New York. “But there are only so many times you can postpone and recycle and revisit. The moment of truth will come in the next few months.”

The export terminal is intended to gather cheap natural gas extracted from remote parts of western Canada, chill it to liquid form known as LNG and load the fuel into special tankers to transport it to Asia where it fetches much higher prices. Shell holds the largest stake in the project alongside partners PetroChina , Mitsubishi Corp. of Japan, Korea Gas Corp. and Malaysia’s Petroliam Nasional Bhd.

The Canadian LNG project could take five years to construct should the consortium move forward with its final investment decision, Mr. van Beurden said.

Since taking the helm at Shell at the start of 2014, Mr. van Beurden has pushed the company toward natural gas in a shift from its traditional oil business. One of Mr. van Beurden’s early moves as CEO was to acquire rival BG Group PLC and its global LNG business. The acquisition, made at the depths of an energy price crash in early 2016, made Shell the world’s dominant competitor in LNG, and gave it a big position in the nascent business of delivering U.S. shale gas overseas.

Shell took the initial LNG cargo in March from Dominion Energy Inc.’s Cove Point LNG export terminal on Chesapeake Bay, and it has also been a shipper of shale gas from Cheniere Energy Inc.’s Louisiana facility.

 Courtesy: www.wsj.com