Artist’s illustration of the proposed Kitimat LNG facility at Bish Cove near Kitimat. (Kitimat LNG illustration)

Artist’s illustration of the proposed Kitimat LNG facility at Bish Cove near Kitimat. (Kitimat LNG illustration)

Australian energy giant Woodside follows Chevron and bails on LNG project in northwest B.C.

The $30 billion Kitimat LNG project no longer fits into the company’s development plans, says Woodside

What was being promoted as a second massive liquefied natural gas project for Kitimat is on its way to being shelved now that Australian energy giant Woodside has announced it is backing out.

The company – which owns 50 per cent of Kitimat LNG – announced earlier this week that the project, designed to develop a new source of LNG supply to Asian markets, no longer fits into its development plans and it will now focus on opportunities bringing a higher shareholder return.

In doing so it is following Chevron, which owns the other 50 per cent, in backing out. That company put up its share for sale in late 2019 and with no apparent purchasers, said in March it would stop putting money into the project.

Woodside said it will spend between (US) $40-60 million in winding up its responsibilities, in a statement released on May 18.

Its project assets include the proposed 480-kilometre Pacific Trail Pipeline from northeastern B.C. to the proposed plant site at Bish Cove.

Anticipated costs for all phases of Kitimat LNG were in the $30 billion range.

“The Kitimat LNG proposal was designed to develop a new source of LG to supply Asian markets in the latter part of this decade,” Woodside said in a release. “However we have decided to prioritise the allocation of capital to opportunities that will deliver nearer-term shareholder value.”

It says it is now concentrating on a final investment decision for an LNG project in Australia and an oil project off the coast of Senegal, but will still continue to work under their joint venture with Chevron to protect the value during the exit.

Woodside’s announcement caused an uproar among local northwest B.C. leaders with regards to the fate of KLNG and other major investments in the region.

Skeena BC Liberal MLA Ellis Ross took to social media on Monday to talk about the Australian giant’s pullout from the Kitimat LNG project.

“There’s something wrong when a $30 billion project, fully permitted, cannot get sold in an international market,” Ross said in a Facebook live video posted on May 17.

Ross, who was also the former chief councillor of the Haisla Nation, raised concerns that the way the province of B.C. operates, when it comes to economic development is not conducive to attract investments.

He said that B.C.’s politicians have done nothing outside of praising existing industry and have not taken enough measures to encourage the survival of investments in the province.

“What they do is tax the business community, who then move their operations to the U.S. or elsewhere. To me this means that the people of British Columbia are being shortchanged,” Ross said.

Referring to the jobs that the LNG Kitimat project would have brought in, Ross said that it would benefit future generations, in the communities where they are set up. If there are no jobs, there are going to be no taxpayers and the deficits are going to affect future generations and usher in inflation, he said.

The MLA also took a dig at the NDP government and said that they are “chasing all these investments out of B.C”. for “short-term politics.”

Kitimat Mayor Phil Germuth said that the council will be meeting with Woodside and Chevron in the near future to discuss their plans for the venture’s assets in the area and to ensure that the companies’ divestment occurs in a manner that will open future economic opportunities for the community and region.

“The District believes that Kitimat LNG is still a socially, economically, and environmentally viable project; however, we understand that the project has struggled to secure a new proponent to progress the project forward within the current global economy,” said Germuth.

The mayor also stated that Kitimat is uniquely situated with necessary infrastructure and resources making it an optimal location to connect Canada to global markets.

“We are confident that the assets, which have been dedicated to the Kitimat LNG project for several years, will attract new investors and new opportunities for our community, region, and nation,” said Germuth.

As the demand for LNG from large energy consumers, like India and China, has increased, according to Reuters, three North American projects have halted development in the last few months, including Kitimat LNG, as Qatar has significantly increased supply. COVID-19 has also led to price drops.

-With files from Rod Link and Binny Paul

READ MORE: Kitimat mayor unfazed by Chevron decision to bail on Kitimat LNG


 


jacob.lubberts@northernsentinel.com

kitimatLNG

Just Posted

Raeya Evie Duncan was the 100th baby born at Chilliwack General Hospital for the month of May. She is seen here with her parents Alysha Williams and Andrew Duncan on June 12, 2021. (Jenna Hauck/ Chilliwack Progress)
Baby boom in Chilliwack as record number of infants born at CGH in May

‘COVID babies are coming out,’ says dad of 100th baby born at Chilliwack General Hospital last month

Syringes prepared with Pfizer’s COVID-19 vaccine at a vaccination site in Long Beach, Calif., Friday, March 5, 2021. (AP Photo/Jae C. Hong)
Walk-ins welcome at upcoming G.W. Secondary vaccine clinic

Second consecutive Saturday Fraser Health has scheduled a same-day clinic in a Chilliwack school

Migrating sockeye in the Fraser River August 7, 2007. (Fisheries and Oceans Canada)
First Nations, commercial, and recreational harvesters join forces to save Fraser River fish

‘We have to work together to rebuild these stocks while there is still time,’ says delegate

Vancouver courthouse. (Photo: Tom Zytaruk)
Man loses bid to appeal conviction for 1999 rape at Abbotsford music festival

James Redden, 53, formerly of Nanaimo, was found guilty in 2019 following six-day trial

Dozens of demonstrators gathered in March at the Hope Station House, showing support for preserving the 1916 building. (Photo/Christian Ward)
New reports breathe life into efforts to save the Hope Station House

The documents were presented to District of Hope Council at a meeting June 14

People watch a car burn during a riot following game 7 of the NHL Stanley Cup final in downtown Vancouver, B.C., in this June 15, 2011 photo. THE CANADIAN PRESS/Geoff Howe
10 years ago: Where were you during the 2011 Vancouver Stanley Cup Riots?

Smashed-in storefronts, looting, garbage can fires and overturned cars some of the damage remembered today

(Black Press Media file)
Dirty money: Canadian currency the most germ-filled in the world, survey suggests

Canadian plastic currency was found to contain 209 bacterial cultures

(pixabay file shot)
B.C. ombudsperson labels youth confinement in jail ‘unsafe,’ calls for changes

Review states a maximum of 22 hours for youth, aged 12 from to 17, to be placed in solitary

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Eleonore Alamillo-Laberge, 6, reads a book in Ottawa on Monday, June 12, 2017. THE CANADIAN PRESS/Sean Kilpatrick
Parents will need to fight ‘COVID learning slump’ over summer: B.C. literacy experts

Parents who play an active role in educating their children this summer can reverse the slump by nearly 80%, says Janet Mort

The border crossing on Highway 11 in Abbotsford heading south (file)
Western premiers call for clarity, timelines on international travel, reopening rules

Trudeau has called Thursday meeting, premiers say they expect to leave that meeting with a plan

The B.C. government’s vaccine booking website is busy processing second-dose appointments, with more than 76 per cent of adults having received a first dose. THE CANADIAN PRESS/Jonathan Hayward
B.C.’s COVID-19 infections, hospitalizations stable for Tuesday

108 new confirmed cases, 139 in hospital, 39 in intensive care

A worker, at left, tends to a customer at a cosmetics shop amid the COVID-19 pandemic Thursday, May 20, 2021, in Los Angeles. (AP Photo/Marcio Jose Sanchez)
Half of cosmetics sold in Canada, U.S. contain toxic chemicals: study

Researchers found that 56% of foundations and eye products contain high levels of fluorine

Most Read