* Energy Transfer delays investment decision to 2021
* Shell relinquishes 50% stake amid spending cuts
* Decision comes after collapse in oil prices
(Adds background, recasts throughout)
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, in a move that resulted in its partner,
Energy Transfer LP, delaying their final decision on
going ahead with the project to next year.
Lake Charles is one of several LNG export projects based
around the world that have been delayed in recent months by the
collapse in global energy prices. Global LNG demand has been
hitting new record highs for years, thanks to big demand from
Asian nations like China and India as they diversify away from
dirtier coal power generation.
However, the crash in oil and gas prices has caused major
LNG exporters like Qatar and oil giant Exxon Mobil Corp
to put off gigantic new facilities or expansions of existing
projects. U.S. gas prices have recently dropped to their lowest
since 1995.
"It's telling that (Shell) a major would walk away from a
major outlet for long-term gas supply," said Ira Joseph, head of
global gas and power analytics at S&P Global Platts, noting that
storage, port and pipeline work was already in place on the
project.
Analysts have anticipated that a number of the projects
under development worldwide would not come to fruition. In
total, U.S. energy firms alone are developing over 50 billion
cubic feet per day (bcfd) of new export capacity - more than all
the worldwide consumption of LNG in 2019, which was about 46.3
bcfd, according to Refinitiv Eikon data.
The Lake Charles project, one of a number of large LNG
facilities planned in the wake of the U.S. shale boom, envisaged
converting Energy Transfer's existing import and regasification
facility into a 2.2-bcfd 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.
Energy Transfer said it expects to make a final investment
decision by early 2021 on whether to build the plant, a delay
from its earlier timeline for a decision by late 2020.
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.
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, four sources said
in February.
(Reporting by Scott DiSavino in New York and Shradha Singh in
Bengaluru; Editing by Susan Fenton, Lisa Shumaker and Marguerita
Choy)
