Royal Dutch Shell (LON:RDSA) has decided to invest in a multibillion-dollar liquefied natural gas (LNG) project in western Canada, the Anglo-Dutch oil major has said. The news comes after the company announced that it had won a 35-year production sharing contract for a block offshore Brazil.
Shell’s share price has been steady in London in today’s session, having inched 0.32 percent higher to 2,657.00p as of 13:31 BST. The shares are outperforming the broader UK market, with the benchmark FTSE 100 index having slipped into the red and currently standing 0.30 percent lower at 7,472.96 points.
Canada LNG project
Shell announced in a statement today that it had taken a final investment decision on LNG Canada, a major LNG project in Kitimat, British Columbia, in which the Anglo-Dutch giant holds a 40-percent working interest.
“We believe LNG Canada is the right project, in the right place, at the right time,” the group’s chief executive Ben van Beurden commented in the statement, adding that global LNG demand is “expected to double by 2035 compared with today, with much of that growth coming from Asia where gas displaces coal”. Bloomberg noted in its coverage of the news that LNG Canada will be able to send cargoes from Kitimat to Tokyo in about eight days, versus 20 days from the US Gulf.
The group noted that with its partners also having taken final investment decisions, construction will start immediately while first LNG is expected before the middle of the next decade.
Analysts on Shell
HSBC, which sees Shell as a ‘hold,’ boosted its price target on the shares from 2,800p to 2.880p last month. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 2,914.69p.
As of 13:54 BST, Tuesday, 02 October, Royal Dutch Shell Plc 'A' share price is 2,657.00p.