Chevron selling its stake in Kitimat LNG Project

John Crawford
12/11/2019

Less than a week after the project received a 40-year export licence, Chevron has announced it's putting its 50% stake in the Kitimat LNG Project up for sale.
   
The move comes as the company looks to cut spending on some investments and take a charge of at least US$10 billion because lower long-term prices for oil and natural gas will reduce the value of its assets.
    
Chevron says the decision is part of its global portfolio optimization effort focused on improving returns and driving value.
    
This decision only impacts Chevron's stake in the Kitimat LNG Project.

The company's other assets in Canada are not included in the decision.

In a statement, Chevron said that, while Kitimat LNG is a globally competitive project, it will not be funded by Chevron and may be of higher value to another company.
   
But during the sale process, Chevron says it plans to keep working on the project with its joint venture partner Woodside, government and First Nations partners.


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Last Thursday, the Canada Energy Regulator -- which replaced the National Energy Board earlier this year -- announced it had approved Chevron's application for a 40-year licence to export natural gas from Kitimat LNG, and it also rejected Smithers environmentalist Mike Sawyer's application to restart the regulatory process and hold public hearings.

The application filed last spring to the National Energy Board aimed to double the previously approved export licence duration and nearly double the potential output of the facility to 997 billion cubic feet of natural gas per year.
    
That's the equivalent of about 18 million tonnes of liquefied natural gas, a substantial increase over the previous 10-million-tonne, 20-year licence which is set to expire at the end of this year.



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This report by The Canadian Press was first published Dec. 11, 2019.

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