Chevron to sell the 50% interest in Kitimat LNG plan as it writes down resources by $10B
The preference by Chevron Corp. to try to sell a 50 per cent seductiveness in a Kitimat LNG plan on a B.C. seashore throws a mystic lurch of “long-dated cold water” on expansion in a Canadian healthy gas industry, an research says.
The California-based association announced a intensity sale in a 2020 budget, adding it would also cut appropriation to gas-related ventures including Kitimat LNG and a shale gas fields in a northeastern United States.
It also announced a assign of during slightest US$10 billion opposite a resources since of approaching reduce long-term prices for oil and gas.
“With (Tuesday’s) budget, Chevron threw some long-dated cold H2O on a Canadian gas macro, as a association announced they are shortening appropriation for a Kitimat LNG project,” pronounced analysts during Tudor Pickering Holt Co. in a news Wednesday.
“While we don’t consider investors were baking in any long-term gas direct associated to a project, any advancements expected would have been good received.”
The analysts forked out Chevron has entrance to about 100 million cubic feet per day of gas prolongation to supply a due plan to super-cool and boat out as most as 2.3 billion cubic feet of gas per day.
Chevron’s pierce is a latest in a fibre of setbacks for B.C.’s nascent liquefied healthy gas attention that once boasted scarcely 20 due projects with a pragmatic guarantee of a new higher-priced trade marketplace in Asia for Western Canada’s abounding healthy gas resources.
Chevron is not a initial association to wish out of Kitimat LNG — it bought a 50 per cent seductiveness from Calgary-based Encana Corp. and Houston-based EOG Resources, Inc., in Dec 2012.
In a same transaction, Houston-based writer Apache Corp. lifted a seductiveness in Kitimat LNG from 40 per cent to 50 per cent. But dual years later, underneath vigour from romantic investors, it sole that seductiveness to Australian Woodside Petroleum Ltd., that stays Chevron’s partner.
Malaysian appetite hulk Petronas cancelled a Pacific NorthWest LNG plan in 2017 and after assimilated a Royal Dutch Shell-led $40-billion LNG Canada project, that stays a usually plan underneath construction after being green-lighted in 2018.
Finance Minister Bill Morneau pronounced Wednesday a sovereign supervision still sees a “very certain opportunity” for LNG in Canada, suggesting Chevron stays committed to saying a plan pierce brazen notwithstanding a efforts to rebalance a item portfolio. Alberta Premier Jason Kenney says he’s also confident about a destiny of LNG after new meetings with some investors.
Earlier this month, a Canada Energy Regulator authorized a 40-year looseness to trade healthy gas for Kitimat LNG, doubling a prior looseness generation and scarcely doubling a intensity outlay of a trickery to 18 million tonnes of liquefied healthy gas per year, a estimable boost over a prior 10-million-tonne looseness that was set to finish during a finish of this year.
Chevron pronounced a decisions are partial of a tellurian portfolio optimization bid focused on improving earnings and pushing value.
“Although Kitimat LNG is a globally rival LNG project, a strength of Chevron Corp.’s tellurian portfolio of investment opportunities is such that a Kitimat LNG Project will not be saved by Chevron and might be of aloft value to another company,” Chevron pronounced in a statement.
“Chevron intends to embark soliciting expressions of seductiveness for a interests in a Kitimat LNG Project. No timeline has been set to interpretation this process.”
The association pronounced it would continue to work with Woodside and supervision and First Nations partners during a process.
The Kitimat LNG plan includes upstream healthy gas lands in a Liard and Horn River Basins in northeastern B.C., a 471-kilometre Pacific Trail Pipeline and a gas liquefaction trickery during Bish Cove nearby Kitimat.
Article source: https://www.cbc.ca/news/canada/calgary/chevron-kitimat-lng-selling-stake-1.5392105?cmp=rss