GLNG: Woodside to exit Kitimat LNG

Australia’s Woodside Energy announced this week that it would exit its 50% non-operated interest in the proposed Kitimat LNG project on Canada’s West Coast.
The company will either sell or wind up and restore the assets, leases and agreements covering both the LNG terminal’s site in Bish Cove, British Columbia, and the 480-km Pacific Trail pipeline route.
This comes roughly two months after operator Chevron said it was ceasing all funding for feasibility work on Kitimat LNG. Chevron had also been trying to sell its 50% stake in the project, but no buyer had emerged. Indeed, Woodside had previously tried to sell down its Kitimat stake, with no success, but had said in March that it had not yet given up on moving the project forward.
“Following Chevron’s decision to exit KLNG and subsequent decision in March 2021 to cease funding further feasibility work, Woodside undertook a comprehensive review of our options for the project and our wider development portfolio,” said Woodside’s acting CEO, Meg O’Neill, in a May 18 statement. “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.”
Woodside said the opportunities O’Neill was referring to were located in Australia and Senegal.
The company expects its 2021 net profit after tax to take a hit of roughly $40-60mn as a result of costs associated with its exit from Kitimat. However, O’Neill said Woodside would retain an upstream position in BC’s Liard Basin, which would provide it with a low-cost option to investigate potential future natural gas, ammonia and hydrogen opportunities in the province.