Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Cancel Anytime
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

A stalled project in Bish Cove in Kitimat, British Columbia on Oct. 7, 2018.

Amber Bracken/The Globe and Mail

Australia’s Woodside Petroleum Ltd. is seeking to unload its 50-per-cent stake in Kitimat LNG, two months after co-owner Chevron Corp. decided to halt funding for the liquefied natural gas project in northern British Columbia.

Meg O’Neill, acting chief executive officer of Woodside, said the company will instead focus on the Scarborough LNG project in Australia and the Sangomar offshore oil project near Senegal.

“The Kitimat LNG proposal was designed to develop a new source of LNG to supply Asian markets in the latter part of this decade,” Ms. O’Neill said in a statement on Tuesday from Perth. “However, we have decided to prioritize the allocation of capital to opportunities that will deliver nearer-term shareholder value.”

Story continues below advertisement

In mid-March, California-based Chevron opted to stop funding for the joint venture after no buyers surfaced for its stake in the much-delayed project. Chevron placed its 50-per-cent interest in Kitimat LNG for sale in December, 2019.

Woodside’s exit strategy marks the end of its B.C. LNG dreams. Three years ago, the company axed plans to build its own LNG project at Grassy Point, located near Prince Rupert, B.C.

Kitimat LNG’s proposed Pacific Trail Pipeline sought to transport natural gas from the Summit Lake area in the B.C. Interior to the West Coast terminal site at Bish Cove, located on Haisla Nation reserve land near Kitimat, B.C.

Woodside has now joined Chevron in the tough task of trying to sell to deep-pocketed buyers, who would need to spend billions of dollars to construct the LNG project and build the 480-kilometre pipeline. If no buyers emerge, the project will be mothballed indefinitely.

Woodside said it will retain its position in properties for natural gas drilling in northeast B.C. shale plays co-owned with Chevron in the Liard Basin. “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,” Ms. O’Neill said.

Chevron and Woodside previously disclosed a total of US$2.32-billion in writedowns related to asset devaluations from their investments in the Bish Cove joint venture.

The site preparation at Bish Cove and other work, including constructing a new road along difficult terrain near Douglas Channel, turned out to be much more costly and complicated than originally anticipated.

Story continues below advertisement

In February, 2020, Chevron booked a non-cash, after-tax impairment charge of US$1.6-billion while Woodside wrote down US$720-million. On Tuesday, Woodside said costs associated with exiting Kitimat LNG would result in a hit of US$40-million to US$60-million to its net profit after tax.

Chevron bought its stake in Kitimat LNG in 2013 from Encana Corp. and EOG Resources Inc., while Woodside acquired its interest in 2015 from Apache Corp.

In mid-2019, as Kitimat LNG’s operator, Chevron submitted a revised plan to B.C. and federal regulators, aiming to start terminal construction in 2023. The plan called for electric-motor-driven technology to supercool natural gas into liquid form.

In 2014, there were more than 20 proposals in B.C. to ship LNG in tankers to markets overseas. Despite much hype seven years ago, only the Royal Dutch Shell PLC-led LNG Canada consortium is currently constructing a terminal to export the fuel to Asia.

LNG Canada hopes to begin exports in 2025 from its $18-billion terminal, located on an industrial site on the Haisla’s traditional territory in Kitimat. Work has been continuing on the TC Energy Corp.-operated Coastal GasLink pipeline, which will transport natural gas from northeast B.C. to LNG Canada’s terminal site.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies