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Shell to proceed with BC energy plans despite political uncertainty

Will maintain production in the Montney region, move toward final investment decision on Kitimat LNG decision.


CALGARY — Royal Dutch Shell will forge ahead with its energy development plans in BC regardless of the uncertainty swirling around the province’s political future, says the company’s Canadian country chair.

Energy investments in BC have been cast into doubt after the May 9 provincial election that saw the Liberals win 43 seats and the NDP take 41 – a situation that gives the Green party the balance of power with their three seats.

Last week, the NDP and Greens formalized an alliance that could see them oust the Liberals from power. But Michael Crothers, president of Shell Canada, said that shouldn’t deter the company’s plans for a liquefied natural gas export project in Kitimat, BC, because NDP Leader John Horgan has backed that project.

“We’re optimistic we’ll get support if we choose to proceed,” Crothers said.

Horgan has said he supports the project. But Green Leader Andrew Weaver has expressed opposition to LNG development.

Crothers said after the sale of Shell’s oil sands assets to Canadian Natural Resources closed last week, the company will also now concentrate on its shale oil and gas properties in BC and Alberta, along with its refining and chemical businesses near Edmonton.

Shell and its partners in LNG Canada – PetroChina, Korea Gas and Mitsubishi – announced last summer a final investment decision for the Kitimat facility would be delayed because of poor global markets.

But Crothers said the market appears to be improving as China and India move away from burning coal. He said there’s still no timeline for an investment decision, though four engineering firms have been asked to bid on contracts to design and construct the facility.

Shell intends to maintain production in the northeastern BC Montney region while planning to quickly ramp up production once a final investment decision is reached on the Kitimat project, he added.

Crothers also said that Shell Canada’s capital budget is expected to fall from $2 billion last year to about $1.5 billion this year after the Canadian Natural Resources sale.

News from © Canadian Press Enterprises Inc. 2016

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