* Shell's Voser says Canada can't weather regulatory delay
* Supports Ottawa's plans for streamlining
* Can add Athabasca oil sands volumes for under $50/bbl
By Jeffrey Jones
CALGARY, Alberta, May 29 Canada only has until
the end of this decade to build up its liquefied natural gas
industry or face being overtaken by other countries looking to
cash in on booming demand for the fuel throughout Asia, Royal
Dutch Shell Plc's chief executive said on Tuesday.
Shell, which plans a multibillion-dollar liquefaction plant
on Canada's West Coast, believes Ottawa's controversial moves to
streamline regulatory reviews for energy projects are necessary
to avoid missing the opportunity as the Asia-Pacific LNG market
is forecast to double by 2030, CEO Peter Voser said.
"A lot of projects are coming in over the next five to six
years, and then there is kind of a window. Then we can see,
already, later on after that window the next wave coming," Voser
told reporters after meeting the oil major's Canadian staff in
Calgary. "So there's clearly a window to be captured."
This month, Shell, along with partners PetroChina
, Kogas and Mitsubishi Corp,
detailed plans for a 2 billion cubic feet a day LNG plant at
Kitimat on the Pacific coast to be in service by around 2020. It
joined at least two other groups planning similar plants at that
port, one led by Apache Corp and another that includes
the Haisla First Nation. None of the proponents have sanctioned
the projects yet.
Canada's gas industry, buffeted by depressed North American
markets, is looking to the Asian market as massive gas reserves
get unlocked in the Horn River shale basin of British Columbia
and in other deposits. Shell has a growing British Columbia
unconventional gas play called Groundbirch.
That prospect, along with LNG plans and massive Alberta oil
sands and heavy crude holdings, will account for a growing
percentage of Shell's worldwide spending, which is now about $32
billion annually, Voser said.
Prime Minister Stephen Harper's Conservative government is
proposing a series of legislative moves to speed up approvals of
projects, including putting fixed timelines on reviews and
taking final decision-making away from the regulators and
handing it to the federal cabinet. Green groups complain that
the streamlining amounts to gutting environmental protections.
"I'm aware of what is the discussion -- effective, efficient
and time-bound -- and at Shell we would be very happy to use
British Columbia as a test project for that," he said.
"I think we need to work on this new regulatory framework,
and personally think it can be done, and it can be done in a
reliable and sustainable and environmentally adequate way so
that you can have all these discussions you need to have
"If this upfront period is 10 years, then others will fill
The company's biggest project in Canada is the 255,000
barrel-a-day Athabasca oil sands project in northern Alberta, in
which it has a 60 percent stake.
Current plans are to increase that by 80,000-90,000 bpd
through the end of the decade in three phases of
"debottlenecking" the current equipment. That can be done at oil
prices of less than $50 a barrel, or less than half the current
Brent crude price, Voser said.
The company is also awaiting regulatory approval for its
steam-driven Carmon Creek oil sands holdings in Alberta's Peace
River region. On Monday, Shell said it was selling another
development, known as Orion, so it could focus on Peace River.
"It is not making the ranking internally. Carmon Creek is a
long-term technology play, where we think we bring different
strengths to the table. We want to develop that huge resource,"
Current plans call for two 40,000 barrel-a-day phases over
the next decade.
Voser said he expects Canadian oil sands spending to rise
into a high single-digit percentage of Shell's overall budget,
up from 5 percent to 6 percent currently.