Shell pulls out of natural gas deal amid virus concerns

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The Shell logo is pictured outside a Shell petrol station in central London on January 17, 2014. Shell issued a severe profits warning on January 17 blaming exploration costs, pressures across the oil industry and disruption to Nigerian output, sparking a sharp drop in its share price. The London-listed energy group said in a surprise trading update that fourth-quarter profits were set to be “significantly lower than recent levels of profitability”. AFP PHOTO / CARL COURT (Photo credit should read CARL COURT/AFP via Getty Images)

LAKE CHARLES, La. (AP) — Shell has pulled out of a multibillion-dollar deal to renovate a liquified natural gas terminal in Louisiana in order to preserve cash during the coronavirus pandemic.

The company’s Dallas-based partner, Energy Transfer, will take over the Calcasieu Parish project but reduce its size, The Advocate reported Monday. The move was also prompted by the drop in oil prices.

The terminal, Lake Charles LNG, was initially built to import cheaper liquefied natural gas more than a decade ago when U.S. prices were high.

But now, the company has plans to export natural gas, mostly to customers in Europe and Asia.

“We continue to believe that Lake Charles is the most competitive and credible LNG project on the Gulf Coast,” said Tom Mason, president of liquified national gas for Energy Transfer.

The project has already been granted an extension until December 2025 by the federal government. It was estimated to create up to 5,000 construction jobs and 200 permanent full-time jobs.

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