U.K.-based Shell expects first production from the LNG Canada export project located in Kitimat, British Columbia to start flowing in mid-2025.

“We're working hard to achieve first production from our large LNG joint venture project in Canada by [the] middle of next year,” Shell CEO Wael Sawan said during the company’s Aug. 1 second-quarter 2024 webcast.

LNG Canada will consist of two trains with a combined processing capacity of 14 million tonnes per annum (mtpa). The project will provide lower carbon LNG to the world, including China, where it will be used to generate power at 45% to 55% of the carbon emissions of coal burning, according to Shell.

LNG Canada is the largest energy investment in Canadian history. Shell has a non-operated 40% interest in the project, which also partners Petronas, PetroChina, Mitsubishi and KOGAS.

Sawan remains bullish around LNG demand through the end of this and the next decade.

“[LNG,] with a 50% growth trajectory between now and 2040, with this being really the only serious credible solution that gives you both energy security as well as decarbonizing the energy system in the particular sectors in which it works,” Sawan said. “I continue to be very bullish about the role of LNG. And we will go through cycles, we will undoubtedly go through cycles.”

To get through the cycles, Sawan said Shell had Henry Hub linked offtake agreements into Brent markets.

Sawan continued: “We look at locking in long term agreements so that we do not have the volatility of the market in the short term while still having some exposure to spot and so on and so forth.”

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Shell CFO Sinead Gorman said a pipeline connecting to LNG Canada was expected to come first.

“And with the pipeline coming in … that will come on the balance sheet before the first LNG cargoes,” Gorman said during the webcast.

500,000 boe/d by 2025

Sawan said overall Shell productino remained on track to deliver more than 500,000 boe/d by 2025.

“Today … 250,000 boe/d has already been brought online, and the rest [will] come through between now and 2025,” Sawan said during the webcast.

Shell has successfully started up projects such as Vito and Rydberg in the U.S. Gulf of Mexico (GoM), Mero 2 in Brazil, Block 10 in Oman, and Timi and Jerun in Malaysia, Sawan said. By year-end 2024, the company expects to start-up Whale in the GoM, Mero 3 in Brazil and Penguins in the North Sea.

“Looking further ahead we have taken FIDs on Atapu-2 in Brazil, and Sparta in the GoM,” Sawan said. “These investments, along with others in the funnel, will help us maintain our liquids production at roughly 1.4 MMbbl/d until the end of the decade.”

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