Shell Reviewing Ownership Structure of Arrow LNG

Shell is reviewing the ownership structure of the planned $20 billion Arrow coal-seam gas export project in Queensland as cost blowouts continue to plague the sector, The Australian has reported. The project is an equal joint venture with China's PetroChina.

The company has begun talks with third parties to help it develop the project but says it may delay approval as it waits for the overheated construction market to cool, the newspaper said.

With China already represented through PetroChina, Shell may be in talks with potential gas buyers, such as Korean or Japanese utilities. It may also be considering combining with one or more of the three LNG plants already in construction on Gladstone's Curtis Island. 

All of those sites have space for extra LNG trains -- which would reduce Arrow's cost -- and are facing big cost pressures. The BG and Santos projects also appear to be short of gas to run at full capacity in their early stages.