Australian independent Woodside Petroleum is exiting its 50pc interest in the proposed 21.2mn t/yr Kitimat LNG project in Canada’s British Columbia, which is expected to weigh between $40mn-60mn on the firm’s expected 2021 profit. Chevron, the operator and 50pc owner of Kitimat, put its stake up for sale in December 2019.
The exit of Kitimat include the sale or winding up and restoration of assets, leases and agreements covering the 480km Pacific Trail pipeline route and the site for the proposed LNG facility at Bish Cove, Woodside said. The 1bn ft³/d (28.3mn m³/d) Pacific Trai would have taken gas from Summit Lake in British Columbia to the downstream Kitimat LNG plant.
Woodside had booked an impairment charge of $720mn after tax on its Kitimat stake in February 2020, saying at the time it was confident about the long-term prospects of Kitimat.
Kitimat was granted a licence from Canadian authorities in 2019 to increase exports to 21.2mn t/yr for 40 years from an initial 11mn t/yr for 20 years.
Woodside will retain a position in the Liard Basin upstream gas resource. “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,” said Woodside acting chief executive Meg O’Neill.
Woodside bought its Kitimat stake along with its 13pc stake in the Chevron-operated 8.9mn t/yr Wheatstone LNG venture offshore Western Australia in 2014 for a combined $2.75bn initially, with the prospect of further payments up to $3.7bn. Woodside was also looking at developing a 20mn t/yr LNG plant at Grassy Point, also in British Columbia, but dropped this plan in 2018.
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