It is looking more and more likely that the only major LNG project to be built in B.C. this decade will be LNG Canada, now that the second partner in the Kitimat LNG project has pulled the plug.
Two months ago, the lead partner in the project, Chevron Corp. (NYSE:CVX), announced it would halt funding of the project. Now the other partner in the project, Australia’s Woodside Energy, has announced it too is abandoning the project.
The company announced it will exit the project, and take US$40 million to $60 million loss. Last year, the company reported a US$720 million impairment on Kitimat LNG.
“The exit will include the divestment or wind-up and restoration of assets, leases and agreements covering the 480 (kilometre) Pacific Trail Pipeline route and the site for the proposed LNG facility at Bish Cove,” the company said in a news release. “Woodside will retain a position in the Liard Basin upstream gas resource.”
Chevron and Woodside each owned 50% of the project, which is permitted. Last year, Chevron announced it would try to sell the project. But it could find no buyers, so in March it announced it would halt all financing of the project.
Woodside said it will be focusing on other projects with better prospects.
“The Kitimat LNG proposal was designed to develop a new source of LNG to supply Asian markets in the latter part of this decade," the company said in its release. "However, we have decided to prioritise the allocation of capital to opportunities that will deliver nearer-term shareholder value."