Shell is developing the LNG Canada project in Kitimat, while BG had been developing an LNG proposal for Prince Rupert. BG announced last fall it was delaying further development of the Prince Rupert project due to uncertainty in the liquified natural gas market.
An initial report came from Bloomberg, which said:
Buying BG would be Shell’s largest acquisition since the $60.3-billion (U.S.) merger of its Dutch and U.K. parent companies in 2005, according to data compiled by Bloomberg. It would unite the U.K.’s first- and third-largest natural gas producers….BG posted a record $5-billion loss in the fourth quarter, mainly due to writing down the value of its Australian assets as commodity prices fell.
BBC News quotes the Wall Street Journal as matching the report.
A Shell spokesman told the BBC: “We’re not making any comment.”
No-one from BG Group was immediately available to confirm or deny the WSJ’s report.
Last fall, when BG put the Prince Rupert project on hold, with a financial investment decision postponed until 2019, the Financial Post, quoted BG executive chairman Andrew Gould as saying, “We’re not abandoning Prince Rupert, we’re pausing on Prince Rupert to see how the market evolves particularly in function of total supply that will come out of the U.S.”
At the time, analysts noted that unlike Shell, Chevron and Petronas, BG had no gas extraction assets in Canada. BG is a privatized spinoff of the once nationalized British Gas company in the UK.