Shell is deferring a final investment decision this year on a facility to export liquefied natural gas from Lake Charles, citing a current oversupply of the fuel and affordability of the project amid lower oil prices, MarketWatch reports.
It is the second delay Shell has made to a big LNG project. Earlier this month the Anglo-Dutch oil giant said it was delaying a final investment decision on an LNG export project in Kitimat, Canada.
“This is not the moment to commit to large-scale capital outlays, even though the fundamentals of these projects in their life cycle still look good,” Ben Van Beurden, CEO of Royal Dutch Shell, said in a conference call this morning.
Shell’s Chief Financial Officer Simon Henry said gearing—a measure of the extent to which a company’s operations are funded by debt—rose sharply to 28.1% at the end of the second quarter, compared with 12.7% in the second quarter of 2015, reflecting a roughly $50 billion acquisition of BG Group in February. The gearing figure could increase further to its 30% limit if oil prices don’t rise from current levels, Henry said.
