Insiders cheer Woodside’s plan to sell stake in B.C. LNG project
Australian oil and gas giant Woodside Energy Ltd. is looking to sell part of its stake in the proposed Kitimat LNG project on Canada’s West Coast in a move that analysts are cheering as a sign the megaproject is progressing.
Woodside managing director and CEO Peter Coleman told Reuters at a conference in Abu Dhabi on Tuesday that the Perth-based company is interested in selling part of its interest in the Chevron Corp.-led Kitimat LNG project in northern British Columbia because it would not be the operator.
Woodside currently holds a 50-per-cent stake in the project alongside Chevron, the would-be operator, and is looking to reduce its exposure by adding another partner to the venture. Analysts believe state-owned oil giants from Kuwait and Malaysia would be the most likely buyers if Woodside does reduce its equity in the project, which would chill natural gas until it reaches its liquid state for export.
“We just look at that and say from a capital management and risk management point of view we would rather hold less equity,” Coleman told Reuters.
“In a major project where we are operating, we would like to be between 40-per-cent and 60-per-cent equity. It kind of makes sense. When you’re non-operator, anywhere between 20 per cent and 40 per cent is the right number,” Coleman said.
Chevron spokesperson Leif Sollid declined to comment on “rumours or speculation” about selling a stake in the project. “Chevron and Woodside continue to engage with potential LNG buyers and other parties interested in the Kitimat LNG project,” he said in an email.
Local energy executives and natural gas analysts said the move by Woodside to find a partner is an encouraging signal as it likely indicates the companies are getting closer to allocating capital to the project and rationalizing their exposure. Unlike other LNG proponents, Woodside does not own upstream natural gas producing assets in Canada.