Shell Suspends Development of Liquefaction Unit, Alberta

The Globe and Mail reported that Shell (NYSE:RDS.A) has halted development operations at the Jumping Pound complex in southern Alberta, Canada. A boom in shale gas has made natural gas prices more competitive, but high development costs remain a challenge, as stated by the Globe.

As quoted in the publication:

Gas liquefaction is increasingly being produced for use in transportation of large road vehicles, in trains, and as a shipping fuel. “We believe LNG (liquefied natural gas) in transport is a considerable opportunity for Shell, but it is an emerging market and we must have a balanced approach to its development, (so) we have suspended development of the liquefaction unit at the Jumping Pound facility,” a Shell spokesman said on Friday.

A note from Deutsche Bank was cited as stating:

This as another sign that the new CEO (Ben van Beurden) is applying a greater degree of discipline in allocating capital than was previously the case and is actively streamlining the ‘options’ in the portfolio which are to be pursued.

Click here to read the full Globe and Mail article.