* Shell relinquishes 50% stake amid spending cuts
* Decision comes after collapse in oil prices
(Adds details, background)
By Ron Bousso and Shradha Singh
March 30 (Reuters) - Royal Dutch Shell has pulled
out of a major liquefied natural gas (LNG) in Louisiana
following the recent crash in oil and gas prices that has forced
the company to make deep spending cuts.
Shell said that "given current market conditions" it will
not proceed with the Lake Charles project, a 50-50 venture with
U.S. midstream company Energy Transfer.
The project, one of a number of large LNG facilities planned
in the wake of the U.S. shale boom over the last decade,
envisaged converting an existing import and regasification
facility into a multi-train, 16.45 million tonnes per year
(mtpa) facility.
"Whilst we continue to believe in the long-term viability
and advantages of the project, the time is not right for Shell
to invest," Maarten Wetselaar, head of Shell's Integrated Gas
and New Energies division, said in a statement.
Energy Transfer said it will take over development of the
project.
The project had faced difficulties before the 60% collapse
in oil prices since January due to the coronavirus and a price
war between top crude producers Russia and Saudi Arabia.
Last November, Shell asked U.S. regulators to extend the
time to complete the project to 2025 due to a weaker outlook for
natural prices LNG prices as a result of new capacity coming on
line and surging U.S. output.
Shell said last week that it will cut spending by $5 billion
to below $20 billion in 2020 and suspended its vast $25 billion
share buyback plan in an effort to weather the recent collapse
in oil prices.
Other LNG projects also face delays.
Exxon Mobil is likely to delay the greenlighting of
its $30 billion LNG project in Mozambique, six sources told
Reuters in March.
Qatar has also delayed choosing Western partners for the
world's largest LNG project by several months after surprising
the industry with a big expansion plan despite a collapse in
global gas prices, four sources said in February.
(Reporting by Shradha Singh in Bengaluru; Editing by Aditya
Soni and Susan Fenton)
