Americas News
Shell Pulls Back on LNG Fuel Projects
Energy major Shell is slowing down plans for liquefied natural gas (LNG) fuel production in North America, clean transportation news site Fleets & Fuels reports.
"We want to make sure we are on pace with demand as it's growing," a spokewoman said.
"We are looking to ensure that we are doing the right thing at the right time in the right place."
Shell is cancelling a liquefaction plant in Alberta, Canada and putting two other moveable, modular liquefaction system (MMLS) units, in Sarnia, Canada and in Geismar, in the U.S. state of Louisiana, on hold.
The Sarnia and Geismar sites, intended to serve the Great Lakes and Gulf Coast markets, are "under review," the spokeswoman said.
Shell CEO Ben van Beurden said last week that the company is seeking "a tighter grip on performance management with more disciplined use of funds."
One source told Fleets & Fuels that Shell is "pulling back on smaller and more discretionary projects as they focus on the core business" and that the switch in plans for the LNG plants reflects a "lack-of-customer issue."
Interlake Steamship Co. (Interlake), a U.S.-based shipper that had planned to buy LNG bunkers from the Sarnia site, still wants to adopt the fuel, local Canadian newspaper the Observer reports.
"We'd like to see LNG on the lakes, and I think we're still hopeful that will come," said President Mark Barker.
"We've done a lot of work to understand and develop that technology, and what it takes to use LNG, and we're still pursuing it."
Interlake had planned to start using the fuel in spring of 2016.
"They are taking a pause, but we are still working with them to see if there's a way that we can continue the work we've done, to see if we can run our ships on LNG," Barker said.
Interlake said last spring that it was developing LNG-fuelled ships that would receive fuel from the Shell facility.
