re: Shell drops out of $5 billion dollar Lake Charles, Louisiana LNG project

Guys in case you missed an important piece, Energy Transfer (the other half of the 50/50 partnership here) has already stated they will take over and continue the project

I'm no expert on energy and o&g, but it seems this project lost the "brand name" investment of Shell but still continues in some form

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Guys in case you missed an important piece, Energy Transfer (the other half of the 50/50 partnership here) has already stated they will take over and continue the project

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Guys in case you missed an important piece, Energy Transfer (the other half of the 50/50 partnership here) has already stated they will take over and continue the project

I'm no expert on energy and o&g, but it seems this project lost the "brand name" investment of Shell but still continues in some form

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A couple of things here:
1. Energy Transfer has not, to my knowledge, confirmed that the project is a “go”. My understanding is they pushed the final investment decision back a year.
2. Shell cut their capital spending by 20% in response to the oil market crash. This probably has more to do with managing their risk in the short term than it does with the long term viability of these LNG projects. Remember Shell is, first and foremost, an oil & has production company. Energy Transfer is a midstream transportation company at heart, so it would not surprise me if they find another partner or, possibly, move forward alone.
3. There are multiple LNG projects in the pipeline in Louisiana. Some will move forward, some will not.

I think the biggest thing a lot of folks miss when these projects get “cancelled” is that they were never officially green-lit. Public announcements get made extremely early in the process.. basically as soon as site selection is complete. After that, permitting and FEED still have to take place before a final investment decision is made. That process can take years.

In that timeframe, a lot can happen. Global market outlooks change. Companies’ financial situations change. Mergers & acquisitions happen. But the point is that you can’t “cancel” a project that was never officially green-lit in the first place.

Good take thanks for that

From BusinessWire:

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Energy Transfer LP (NYSE: ET) announced today that it will take over development of the Lake Charles LNG export project following Shell’s announcement that it has decided not to proceed with an equity investment in the project. Shell advised Energy Transfer that its decision was made in light of current market conditions. Energy Transfer will take over the role of lead project developer and will continue the development of the project. In this regard, Energy Transfer will evaluate various alternatives to advance the project, including the possibility of bringing in one or more equity partners and reducing the size of the project from three trains (16.45 mtpa of LNG capacity) to two trains (11.0 mtpa).

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AND FOR SFP:

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"We continue to believe that Lake Charles is the most competitive and credible LNG project on the Gulf Coast," said Tom Mason, Executive Vice President and President - LNG. "Having the ability to capitalize on our existing regasification infrastructure at Lake Charles provides a cost advantage over other proposed LNG projects on the Gulf Coast

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LINK

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Energy Transfer LP (NYSE: ET) announced today that it will take over development of the Lake Charles LNG export project following Shell’s announcement that it has decided not to proceed with an equity investment in the project. Shell advised Energy Transfer that its decision was made in light of current market conditions. Energy Transfer will take over the role of lead project developer and will continue the development of the project. In this regard, Energy Transfer will evaluate various alternatives to advance the project, including the possibility of bringing in one or more equity partners and reducing the size of the project from three trains (16.45 mtpa of LNG capacity) to two trains (11.0 mtpa).

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Right. So they haven’t made a final investment decision.

So honest question. Where should us current Southern LA residents be looking to move? Can Houston handle us all, assuming we have a healthy work ethic?