Shell shafts Browse and Arrow

From the AFR and Shell comes the news I’ve been expecting on the last two big LNG projects awaiting approval:

Chief executive Peter Voser told investors last night in London that Shell had “slowed the pace on new FIDs [final investment decisions] for LNG in Australia, where there’s cost inflation pressures.”

Mr Voser said Shell would “take more time” before expanding the Gorgon LNG venture which suffered a massive cost blowout late last year to $52 billion, and on the Arrow coal seam gas-based LNG venture in Queensland with PetroChina.

Shell is also a partner in Woodside Petroleum’s Browse LNG venture, which is estimated by analysts to cost $40 billion or more, and is supposed to reach a final investment decision by June.

I take “delay” to be a diplomatic shelving. When we pass the peak in mining investment, it will be a steep descent.

Comments

  1. Probably best a delay at present. Some issues re Browse remain to be sorted, very difficult to get adequate personnel (drives costs further) and after all, the gas will still be there when timing is right.

    Big picture win win.

  2. “I take “delay” to be a diplomatic shelving. When we pass the peak in mining investment, it will be a steep descent.”

    Yep.

  3. H & H (and everyone else), can somebody please point me to a list/summary of the remaining (committed) LNG capital projects in QLD. I understand that there are (were!) four majors: APLNG (Origin) QGC/BG, GLNG (Santos) and Arrow. Is there still a pipeline of ‘committed’ projects, or can everything be simply ‘delayed’ by someone with a sensible head, the same way Shell have put the brakes on Arrow?

    I’m trying to put some science to forecasting the end of the boom-within-a-boom in the Surat LNG fields…