A decision on whether to go ahead with a fourth LNG plant on Curtis Island is more than a year off as oil giant Shell confirms it will delay making any major financial investment decisions in 2014.
The $10 billion Arrow Energy LNG project was initially scheduled to be approved late last year, and while owner Shell says the facility is still in the pipeline, it will remain on the backburner for the time being.
"We recently… postponed the final investment decision on the Arrow LNG project in Australia. We didn't like the economics and inflation risks on these proposals," new chief executive Ben van Beurden said.
"We are not expecting any major financial investment decisions in Asia Pacific LNG in 2014."
According to van Beurden, Shell’s Australian assets remained an important part of its global portfolio including the Prelude floating LNG project, the Sunrise LNG project and the Chevron-operated Wheatstone project.
However he said the company would need to make “hard choices in our worldwide portfolio to improve Shell's capital efficiency.”
"Shell's focus in LNG is to…be capital efficient in progressing the next wave of LNG options - Abadi, Canada LNG, Browse, and Arrow," van Beurden said.
"The company will increase the pace of asset sales, which are expected to be $US15bn for 2014 and 2015 combined in upstream and downstream,’ van Beurden confirmed.
Shell posted a December quarter profit of $US2.2 billion, down from $US7.4 billion a year earlier.
While full year profit fell to $US16.7 billion, from $US27.2 billion.
"Our overall strategy remains robust, but 2014 will be a year where we are changing emphasis, to improve our returns and cash flow performance," van Beurden said.
"In Australia, Shell has received indications of interest to acquire its refining and parts of its marketing portfolio.
"The company is considering its options for divestment, subject to achieving satisfactory commercial terms for these positions."