* Energy Transfer delays FID from late 2020 to early 2021
* Shell relinquishes 50% stake amid spending cuts
* Decision comes after collapse in oil prices
(Add comments from Energy Transfer, background)
By Ron Bousso and Shradha Singh
March 30 (Reuters) - Royal Dutch Shell Plc pulled
out of a major liquefied natural gas (LNG) export plant under
development in Louisiana following the recent crash in oil and
natural gas prices that has forced the company to make deep
spending cuts.
Energy Transfer LP, which was developing the project
with Shell, said it remains focused on the commercial
development of Lake Charles and is working toward making an
early 2021 final investment decision (FID) to build the plant.
Previously, the company had said it could make that FID in
late 2020, which would allow the project to enter service in the
second half of 2025.
Shell said that "given current market conditions" it will
not proceed with its 50-50 Lake Charles venture with 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 Energy Transfer's existing import and
regasification facility into a multi-train, 16.45 million tonnes
per year (MTPA) export 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.
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, the companies asked U.S. regulators to extend
the time to complete the project to 2025 due to a weaker outlook
for gas prices as a result of new capacity coming online 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 oil price
collapse.
Other LNG projects also face delays.
Exxon Mobil Corp 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 Scott DiSavino in New York and Shradha Singh in
Bengaluru; Editing by Susan Fenton and Lisa Shumaker)
