Shell says will work with UK, EU after Brexit vote

The world’s largest LNG company, Shell said Friday it will work with the UK government and European institutions on any implications for its business from Britain’s decision to leave the European Union (EU).

Britain is expected to submit an application to leave the EU following Thursday’s referendum, after which the country would have two years to negotiate an exit.

A Shell spokesman said: “Although Shell was in favour of the UK remaining in the EU, we respect the decision of the majority of the British people who voted to elect to leave.

We will work with the UK government and European institutions on any implications for us.”

Prime Minister David Cameron said on Friday this could be Britain’s “biggest decision in its history” as he was announcing he is to step down by October as Britain voted to leave the EU.

Leaving the EU could make UK energy infrastructure investment costlier and delay new projects at a time when the country needs to plug a looming electricity supply gap, according to Reuters.

BP and Shell are among energy companies who already warned about the potential downside of Brexit (British exit from the European Union).

However, the implications of Britain’s exit from the EU is yet to be seen.

UK gas, LNG

Global law firm Norton Rose Fulbright said in a comment earlier this year that for Brexit to have an effect on UK gas prices, it would need to lead to consequences such as export tariffs imposed on EU gas flowing to the UK.

Besides pipeline imports, Britain imports chilled gas via three LNG import terminals, namely the South Hook terminal and Dragon LNG in the port of Milford Haven, and the Grain LNG terminal on the Isle of Grain.

“As the infrastructure is already largely in place, we would expect operations and gas flows to continue as normal, irrespective of any Brexit,” Norton Rose Fulbright said.

LNG accounted for only 13 per cent of UK gas supply in 2015 but there is “room for this to increase given current spare capacity and with a fourth import terminal due to start up later this year (offshore Barrowin-Furness)”.

However, whether or not the UK will be an attractive destination for spare LNG volumes is more likely to be driven by the price of gas in the UK market than any other factor, the law firm added.