Shell shelves small-scale LNG plans

Anglo-Dutch supermajor Shell is shelving plans for now to build three small-scale gas liquefaction plants in North America that would produce LNG for transportation fuel.

The company confirmed it will "pause the fabrication" of a facility in in Geismar, Louisiana as well as one in Sarnia, Ontario and at the existing Jumping Pound gas complex in outside Calgary.

Shell took a final investment decision on the projects last year.

"We believe there is a considerable opportunity for Shell globally and in North America in LNG as a transport fuel," a spokeswoman said in a statement. "Having said that, LNG for Transport is still an emerging market, and we must be balanced in our approach.

"We continue to adapt to the growing demand from sectors like marine and on-road while evaluating the most promising locations and opportunities.

It said it will continue to "review" opportunities, but must "ensure our LNG for Transport portfolio is flexible enough" to stay competitive.

The Sarnia complex would have produced about 0.3 million tonnes per annum, while the other two would have produced about 0.25 mtpa.

The units were due to be in operation by 2015 or 2016.

Shell has previously ditched gas projects in North America, following the $2 billion write-down on shale assets it took last year.

In December, Shell said it was backing out of plans to build a multibillion-dollar gas-to-liquids plant in Louisiana due to rising costs.

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