Shell Likely To Hold Arrow LNG Project
Royal Dutch Shell will wait to develop the Arrow liquefied natural gas venture in Australia as recent approvals for rival projects valued at about $US50 billion ($45.5bn) were expected to drive up costs.
"We are quite happy to go later," said CEO Peter Voser. "That gives us a cost advantage."
Shell is among several companies developing more than a dozen LNG projects in Australia and Papua New Guinea to tap rising Asian demand.
Arrow Energy, which was acquired last year by Shell and PetroChina and is developing the project, said last month that it expected an investment decision in late 2013.
"We are not in a rush here," Mr Voser said. "We will develop this. We see the rush into quite a few final investment decisions by others. That, in our opinion, will drive costs up."
Starting construction of the Arrow project later might mean less competition for skilled labour and an opportunity to co-operate with the other projects, Andrew Faulkner, chief executive officer of Brisbane-based Arrow, said last month.
Earlier this week, ConocoPhillips and partner Origin Energy said they would proceed with the first stage of their $US20bn Australia Pacific natural gas development also in Queensland.
This follows earlier approvals of a $16bn venture led by Santos and a separate $15bn investment by Britain's BG Group.
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