Woodside leaves Kitimat LNG

Woodside Energy has decided to exit its 50% non-operated participating interest in the proposed Kitimat LNG liquefaction plant in British Columbia, effectively killing the project pending a buyer or outside financing.

The exit will include the divestment or wind-up and restoration of assets, leases, and agreements covering the 471-km Pacific Trail pipeline route and the site of the proposed plant at Bish Cove.

The company said it will work with Kitimat joint-venture partner and operator Chevron Canada to protect value during the exit. Chevron announced plans to divest its 50% interest in Kitimat LNG in December 2019 and earlier this year ceased funding feasibility work.

Woodside expects to incur a US$40-60 million charge against 2021 net earnings because of the exit. It will retain a position in Liard basin in north-east British Columbia.

The company said exiting Kitimat LNG will allow it to focus on working towards second-half 2021 final investment decision (FID) for its Scarborough LNG development in Western Australia and the continued execution of its Sangomar oil project offshore Senegal.

Woodside earlier this year doubled its LNG supply agreement with Uniper Global Commodities SE, much of which would be supplied from Scarborough starting in 2025 pending FID.

Woodside last year pre-empted a sale by FAR Ltd, Melbourne, of its Sangomar interests and oil discoveries to ONGC Videsh Vankorneft Pte Ltd, seeking to instead acquire the interests itself.

FAR held a 13.67% interest in the Sangomar oil exploitation area and 15% interest in the remaining evaluation area of the Woodside-operated Rufisque, Sangomar, and Sangomar Deep joint venture.

Source: Oil & Gas Journal