Woodside to exit Canada’s Kitimat LNG project with 50% stake sale

Australia-based Woodside Petroleum is set to divest its 50% non-operated stake in the proposed Kitimat LNG project in Canada.

The Kitimat LNG project is a 50/50 joint venture between Chevron Canada and Woodside Energy International (Canada).

The exit includes divestment and restoration of assets, leases and agreements covering the Pacific Trail Pipeline route and the proposed LNG facility site at Bish Cove.

Woodside’s decision to exit follows a comprehensive review of options for the project and its wider development portfolio.

The move will enable the firm to focus on the delivery of higher value opportunities in Australia and Senegal.

The firm expects a $40m to $60m hit to 2021 net profit after tax due to the exit.

Woodside acting CEO Meg O’Neill said: “The Kitimat LNG proposal was designed to develop a new source of LNG to supply Asian markets in the latter part of this decade.

“However, we have decided to prioritise the allocation of capital to opportunities that will deliver nearer-term shareholder value.”

In 2019, Chevron Canada, a unit of Chevron, decided to offload its stake in the Kitimat LNG project in a bid to optimise global portfolio and improve returns.

Subsequently, the firm also ceased feasibility work at the project in March 2021.

However, the Australian petroleum exploration and production firm will retain a position in the Liard Basin upstream gas resource.

O’Neill added: “Retaining an upstream position in the prolific Liard Basin provides Woodside a low-cost option to investigate potential future natural gas, ammonia and hydrogen opportunities in British Columbia.”

In a separate development, Reuters cited Royal Dutch Shell CEO Ben van Beurden as saying that the firm is in discussions over stake sale in onshore oilfields in Nigeria.

The move comes as the firm is facing operational issues, as well as lawsuits as a result of spills in the Niger Delta due to pipeline theft and sabotage.

The news of the government being in discussions with the firm over the sale has been confirmed by the Nigerian Oil Minister Timipre Sylva.