Shell CEO: Local price index makes LNG Canada attractive

Shell's LNG Canada is attractive to buyers because it uses a Canadian Alberta Energy Company price index, which is lower in comparison with the Henry Hub price for the U.S. The company's CEO said this on Tuesday.

Shell CEO Wael Sawan told the Energy Asia Conference that the AECO indexation is what makes LNG Canada so attractive in the modern world. He added that the AECO gas will be available at lower prices.

He said: "The differential between AECO, Henry Hub and the proximity of Asia makes this a very attractive project. It will also be one of the least carbon-intensive projects in the world."

According to SNL Financial, the AECO Storage Hub's price was 96.6 Canadian cents per million British Thermal Units on Monday. This compares to a Henry Hub Futures Price of $3.746 for MMBtu.

The LNG Canada project is the first LNG export facility in Canada. It will produce 14 million tons of LNG per year (MTPA) to be exported. The plant is anticipated to

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First LNG this month

LNG Canada is a joint-venture between Shell, Petronas and PetroChina. It also includes Mitsubishi Corporation, Korea Gas, and Mitsubishi Corporation. (Reporting and writing by Florence Tan and Ashley Tang; editing by Jacqueline Wong, Christian Schmollinger and Emily Chow)

(source: Reuters)