LNG – Royal Dutch Shell Plc .com http://royaldutchshellplc.com News and information on Royal Dutch Shell Plc Tue, 22 May 2018 12:46:24 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.5 https://i0.wp.com/royaldutchshellplc.com/wp-content/uploads/2017/04/cropped-Screen-Shot-2017-03-31-at-15.44.47.jpg?fit=32%2C32 LNG – Royal Dutch Shell Plc .com http://royaldutchshellplc.com 32 32 4172002 LNG Canada committed to starting construction on project in 2018: CEO http://royaldutchshellplc.com/2018/05/16/lng-canada-committed-to-starting-construction-on-project-in-2018-ceo/ http://royaldutchshellplc.com/2018/05/16/lng-canada-committed-to-starting-construction-on-project-in-2018-ceo/#respond Wed, 16 May 2018 10:54:50 +0000 http://royaldutchshellplc.com/?p=96797 LNG Canada committed to starting construction on project in 2018: CEO was first posted on May 16, 2018 at 11:54 am.
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Julie Gordon: MAY 15, 2018

VANCOUVER (Reuters) – The chief executive of the LNG Canada project on British Columbia’s northern coast said on Tuesday that the company was committed to starting construction on the C$40 billion ($31.1 billion) liquefied natural gas export project this year. An investment decision on the terminal was delayed in 2016, due to sagging oil prices that hit cash flows, along with an unfavorable supply-demand outlook, but remains on track for 2018, Andy Calitz said at an LNG conference on Tuesday. FULL ARTICLE

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Total, Shell in gas development deal with Oman http://royaldutchshellplc.com/2018/05/14/total-shell-in-gas-development-deal-with-oman/ http://royaldutchshellplc.com/2018/05/14/total-shell-in-gas-development-deal-with-oman/#respond Mon, 14 May 2018 13:05:33 +0000 http://royaldutchshellplc.com/?p=96788 Total, Shell in gas development deal with Oman was first posted on May 14, 2018 at 2:05 pm.
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Two oil majors have struck a deal with Oman over the development of natural gas resources in the Middle Eastern state.

Written by  – 

Total and Shell, as operator, will develop several natural gas discoveries located in the Greater Barik area on onshore Block 6 with respective shares of 25% and 75%. They aim to produce of around 500million cubic feet of gas per day, rising to 1billion at a later stage. Total will use its share to develop a regional hub for supplying LNG as a fuel to marine vessels. Arnaud Breuillac, president, exploration and production at Total, said: “We are pleased to sign this MoU with the Sultanate of Oman that will give us access to new gas resources and the opportunity to develop an integrated gas project. FULL ARTICLE

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Shell ‘cautiously optimistic’ about LNG Canada project, exec says http://royaldutchshellplc.com/2018/05/12/shell-cautiously-optimistic-about-lng-canada-project-exec-says/ http://royaldutchshellplc.com/2018/05/12/shell-cautiously-optimistic-about-lng-canada-project-exec-says/#respond Sat, 12 May 2018 09:56:25 +0000 http://royaldutchshellplc.com/?p=96755 Shell ‘cautiously optimistic’ about LNG Canada project, exec says was first posted on May 12, 2018 at 10:56 am.
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|By: , SA News Editor

Royal Dutch Shell’s (RDS.ARDS.B) is “cautiously optimistic” about its proposed LNG Canada project in Kitimat, B.C., ahead of a potential final investment decision this year, says Shell Canada president Michael Crothers“We’re getting cost estimates finalized [and working] on the economics,” Crothers says, noting the Shell-led partnership recently chose Fluor and Japan’s JGC for the project’s engineering, procurement and construction. FULL ARTICLE

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Champagne bottles to be uncorked at Shell HQ http://royaldutchshellplc.com/2018/05/06/champagne-bottles-to-be-uncorked-at-shell-hq/ Sun, 06 May 2018 16:42:07 +0000 http://royaldutchshellplc.com/?p=96700 Champagne bottles to be uncorked at Shell HQ was first posted on May 6, 2018 at 5:42 pm.
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Printed below is an English translation of an article published today by the Dutch Financial Times, Financieele Dagblad

Shell is hoisting arch-rival ExxonMobil in the neck

Bert van Dijk • Entrepreneurship: 

A few more weeks and the champagne bottles can be uncorked at Shell headquarters. Then the British-Dutch oil and gas multinational for the first time in decades again greater in terms of market value than arch-rival ExxonMobil. At least, if the current price development at both companies continues at the current rate.

Where Exxon has had to deal with setbacks that have affected production, results and returns in recent years, investors are actually charmed by Shell’s growing cash flow, his lucrative oil and gas projects in the deep sea near the US and Brazil, the big financial discipline and cost savings. Important also: an announced share repurchase of $ 25 billion in the period up to the end of 2020.

The goal of Shell CEO Ben van Beurden to become the best company in the sector for investors seems to be within reach. Shell is finally the boss of the uncrowned king of the oil industry. And that while Exxon was more than twice as big as Shell three years ago.

Surprising joint ventures

Exxon and Shell work all over the world and, in addition to each other’s rivals, have also become partners in sometimes surprising joint ventures. As in California, where both companies will jointly build one of the largest solar power plants in the US. This will soon produce steam and electricity with which the last remaining oil can be extracted from one of the oldest and largest oil fields in the US.

The project simultaneously illustrates the past and the future of the oil industry. A future that Shell and Exxon anticipate differently. ‘Shell’s oil and gas reserves have an average lifetime of 9 years, Exxon’s 14 years’, says Jilles van den Beukel, who worked for Shell as a geophysicist for 25 years and is now an independent scientist. ‘The question at Shell is how to get rid of it in the long term. The low reserves of Shell are really a problem, because it is the future of the company. ‘

In part, the low reserves may be a conscious choice. ‘Van Beurden focuses more on liquefied gas, the production of fuels and chemistry, the branch from which he himself came from. But partly the low reserves are the result of a poor track record in Shell’s exploration, despite billions of dollars in investments. It was one of the reasons to take over the British BG Group in 2016 and thus buy reserves’, says Van den Beukel.

Exxon increases investments

The outlook for finding new large oil and gas finds for Shell is no better for Shell. Shell’s exploration budget has been brought to a historically low level during the past quarter. In the past quarter, Shell spent € 230 million on detecting new oil and gas, the lowest investment of the past 14 years. For Shell, debt reduction, dividend and buying back own shares are much more important at the moment.

Exxon currently feels nothing for a large share buyback and increases investments in the coming years, fueled by recent exploration successes. ‘Look at the discoveries at Guyana, where Exxon itself has done one of the largest oil finds of the past decades,’ says Van den Beukel. ‘Since 2015, ExxonMobil has drilled eight exploration wells of which seven were successful, an unprecedented high success ratio. Exxon believes more than Shell in a future where oil will be needed for a long time. ‘

Exxon therefore bets on a long fossil future, while Shell concentrates on maximizing profit from existing activities. For Exxon, the company must see the current temporary difficult period come through if it is to be successful in the long term.

Failed guess in Russia

The weakness of Exxon is due, among other things, to a failed gambling in Russia. The group invested billions of dollars in large oil and gas projects, before American sanctions came to light in 2014 and a large part of these projects came to a standstill.

Despite, according to some, very low reserves, Shell seems to be the ‘winning’ hand in the financial world. Moreover, according to Oswald Clint, who is following Shell for investment bank Bernstein, those reserves are less important than many people think.

According to him, there were also worries about Shell’s reserves in the 1970s, which at that time were among the lowest in the sector. But Shell therefore focused on maximizing the profit from the trade of barrels of oil. Successfully. ‘Today, the LNG branch, ie liquid gas, benefits from this trade DNA’, says Clint. According to him, it is a crown jewel within Shell. ‘And even in the New Energies branch, Shell is aiming for returns of 8% -12%, with the higher returns being achievable through trade.’

But do not write Exxon off, says Van den Beukel. The fact that investors are currently clearly on the hand of Shell does not mean that this will be the case in ten years’ time. ‘Exxon is aiming for a future where oil and therefore the oil price will continue to do well. When that happens, it is becoming increasingly expensive for Shell to find and buy oil and Exxon has an advantage. ‘

 

 

SOURCE

A hundred years of rivalry

The rivalry between Exxon and Shell is one of the largest in the international company history and has been going back more than 100 years. At the beginning of the last century, both companies were fighting each other for market share, including in Asia. Standard Oil, the forerunner of the current ExxonMobil, even made three attempts to acquire Shell. But the Dutch refused time and time again.

According to former Shell director Deterding, ‘it was not wise for Standard to buy us. I dream […] and I believe that our goal is to become the only opponent and therefore the silent partner of Standard. There is no place for a monopoly on this world, but for two large companies that work wherever possible, ‘he wrote in 1907, according to the book’ History of Royal Shell ‘by Joost Jonker and Jan Luiten van Zanden.

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Shell’s $14-billion contract for Kitimat project a sign B.C. may catch the second LNG wave http://royaldutchshellplc.com/2018/04/27/shells-14-billion-contract-for-kitimat-project-a-sign-b-c-may-catch-the-second-lng-wave/ Fri, 27 Apr 2018 20:20:31 +0000 http://royaldutchshellplc.com/?p=96630 Shell’s $14-billion contract for Kitimat project a sign B.C. may catch the second LNG wave was first posted on April 27, 2018 at 9:20 pm.
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Jesse Snyder: April 27, 2018 2:19 PM EDT

The consortium behind LNG Canada named the prime contractors for its $40-billion export project on Friday, taking the development forward amid concerns that steep import tariffs on some steel components could still make the project untenable.

In a decision the consortium called a “significant milestone,” LNG Canada said U.S.-based Fluor Corp. and Japan’s JGC Corp. would lead the $14-billion construction contract for the liquefied natural gas project in Kitimat on the B.C. West Coast. Construction of the facility would employ thousands of workers and take roughly five years to complete.

The consortium, led by Royal Dutch Shell Plc, has yet to make a final investment decision on the project, but says it will come down some time this year. PetroChina Company Ltd., Korea Gas Corp. and Mitsubishi Corp. are the other partners on the project.

Shell has hinted in recent months that LNG Canada is among the top contenders for its next major capacity expansion, as the company looks to maintain its position as the world’s biggest LNG player. The company currently controls nearly 40 per cent of the global LNG market.

“We’ve got a number of build options in the portfolio,” Jessica Uhl, Shell’s chief financial officer, said in a quarterly conference call with analysts Thursday. “LNG Canada is one of the many good options that we have.”

Canada is seen as a preferred destination for LNG export facilities, due to its close proximity to Asian markets and competitive upstream natural gas production in B.C. and Alberta. But in recent years, political dust-ups, environmental opposition, high labour costs and unforeseen provincial taxes on LNG exports have all dampened Canada’s reputation for foreign investment. None of the major LNG projects proposed on the West Coast have yet to move forward.

Meanwhile, analysts are unsure whether LNG prices will rebound high enough in coming years to justify major new export facilities. A rapid expansion in LNG projects in Australia, Russia, the U.S. and elsewhere over the past 10 years introduced a flood of new supply to the market, depressing prices.

“All of those elements need to come into play,” Uhl said Thursday. “So it’s not just one variable that you need to consider when trying to think about the delivered cost to a given customer.”

A major hang-up for LNG Canada are the steep tariffs that would be placed on pre-fabricated modules used in the construction of the plant, which would come from China and South Korea. Those import duties could reach as high as 45 per cent.

In mid-2017, the Canada Border Services Agency and Canadian International Trade Tribunal imposed anti-dumping duties on steel imports from countries like Spain, South Korea and China, amid complaints by manufacturers that they were flooding the Canadian market with cheap supplies of steel.

Shell and its partners have applied to Ottawa’s finance department for a remission order, which would effectively waive any tariffs on those steel modules.

Ottawa has yet to issue the order, and analysts say it is unlikely to happen before negotiations around the North America Free Trade Agreement come to a close. The U.S. has been increasingly open to levelling import tariffs on cheap supplies of steel from China and elsewhere, and has threatened similar tariffs on Canadian steel and aluminum imports.

“Finance Canada continues to carefully monitor this issue, and we are conducting normal due diligence and consultation with implicated stakeholders as we do when considering all remission requests,” Finance spokesperson Jack Aubry said in a written statement.

Patrick O’Rourke, an analyst with AltaCorp Capital based in Calgary, said the project looks increasingly likely to move ahead as Shell looks to expand its LNG presence. A so-called “second wave” in LNG demand could come in the next decade as Asian markets gradually absorb today’s oversupply, analysts say, bolstering the opportunity to build new facilities.

“They’re still very bullish on the LNG market, they’re still seeing a perceived fall in demand in the 2020 timeframe,” O’Rourke said. He gave the project a roughly 60 per cent to 75 per cent likelihood of moving ahead.

Shell’s interest in LNG comes as part of its mammoth US$53 billion acquisition of natural gas company BG Group in 2016, which pivoted the company toward natural gas. Since the deal, Shell has divested of roughly $US27 billion worth of oil assets, including its mining and refinery operations in the Canadian oilsands, which it sold to Calgary-based Canadian Natural Resources Ltd.

The naming of the key contractors for the construction of LNG Canada is a good sign that the project might move ahead, O’Rourke said, though many other questions of cost and politics still linger.

“I think it’s a positive,” he said.

Last month, B.C. premier John Horgan announced some tax breaks for would-be LNG exporters in the province, effectively reversing a specific LNG tax proposed by former premier Christy Clark. Horgan has been on trips to various Asian countries recently in a bid to gauge interest in LNG.

• Email: jsnyder@nationalpost.com | Twitter:

SOURCE

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