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

(PQB News file photo)
Fireworks report highlights enforcement challenges for Regional District of Nanaimo

Director: ‘I just think it’s wasting everybody’s time’

Terry Mazzei next to a truck after it was struck by lightning, with him inside, on Wednesday afternoon, June 9. He walked away from the incident without injury and the truck sustained only mild damage; a blown front tire and newly broken gas gauge. (Wendy Mazzei photo)
Nanoose Bay man walks away unscathed after lightning strike

VIDEO: ‘We like to think that his dad was watching over him’

Douglas Holmes, current Alberni-Clayoquot Regional District chief administrative officer, is set to take on that position at the Regional District of Nanaimo come late August. (Submitted photo)
Regional District of Nanaimo’s next CAO keen to work on building partnerships

Douglas Holmes to take over top administrator role with RDN this summer

This young fledgling white raven was spotted in the Coombs area on May 16. (Mike Yip photo)
Expert says 2 sets of parents producing rare white ravens in mid-Island area

One of the iconic birds is currently recovering at wildlife centre after being rescued

Flowers planted along Highway 19 in downtown Parksville. (Submitted photo)
City of Parksville plants more than 15,000 annual bedding plants

Residents encouraged to take flower photos and post to social media

At an outdoor drive-in convocation ceremony, Mount Royal University bestows an honorary Doctor of Laws on Blackfoot Elder and residential school survivor Clarence Wolfleg in Calgary on Tuesday, June 8, 2021. THE CANADIAN PRESS/Jeff McIntosh
‘You didn’t get the best of me’: Residential school survivor gets honorary doctorate

Clarence Wolfleg receives honorary doctorate from Mount Royal University, the highest honour the school gives out

Two-year-old Ivy McLeod laughs while playing with Lucky the puppy outside their Chilliwack home on Thursday, June 10, 2021. (Jenna Hauck/ Chilliwack Progress)
VIDEO: B.C. family finds ‘perfect’ puppy with limb difference for 2-year-old Ivy

Ivy has special bond with Lucky the puppy who was also born with limb difference

A million-dollar ticket was sold to an individual in Vernon from the Lotto Max draw Friday, June 11, 2021. (Photo courtesy of BCLC)
Lottery ticket worth $1 million sold in Vernon

One lucky individual holds one of 20 tickets worth $1 million from Friday’s Lotto Max draw

“65 years, I’ve carried the stories in my mind and live it every day,” says Jack Kruger. (Athena Bonneau)
‘Maybe this time they will listen’: Survivor shares stories from B.C. residential school

Jack Kruger, living in Syilx territory, wasn’t surprised by news of 215 children’s remains found on the grounds of the former Kamloops Indian Residential School

A logging truck carries its load down the Elaho Valley near in Squamish, B.C. in this file photo. THE CANADIAN PRESS/Chuck Stoody
Squamish Nation calls for old-growth logging moratorium in its territory

The nation says 44% of old-growth forests in its 6,900-square kilometre territory are protected while the rest remain at risk

Flowers and cards are left at a makeshift memorial at a monument outside the former Kamloops Indian Residential School to honour the 215 children whose remains are believed to have been discovered buried near the city in Kamloops, B.C., on Monday, May 31, 2021. THE CANADIAN PRESS/Darryl Dyck
‘Pick a Sunday:’ Indigenous leaders ask Catholics to stay home, push for apology

Indigenous leaders are calling on Catholics to stand in solidarity with residential school survivors by not attending church services

“They will never be forgotten, every child matters,” says Sioux Valley Chief Jennifer Bone in a video statement June 1. (Screen grab)
104 ‘potential graves’ detected at site of former residential school in Manitoba

Sioux Valley Dakota Nation working to identify, repatriate students buried near former Brandon residential school

The Queen Victoria statue at the B.C. legislature was splattered with what looks like red paint on Friday. (Nicole Crescenzi/News Staff)
Queen Victoria statue at B.C. legislature vandalized Friday

Statue splattered with red paint by old growth forest proponents

Most Read