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

Reflective number or design on hoodie. Police are seeking help in identifying three youth involved in an incident on Soderholm Road early June 12. Photo courtesy Campbell River RCMP
Do you know where your kids were at 1:24 a.m.?

Campbell River RCMP seeking help identifying three youths

John Hart Dam near Campbell River, B.C. BC Hydro photo
Campbell River watershed forecasts improve with rainfall

BC Hydro projects slightly higher resevoir levels and river flows after rainy May and June

North Island MLA Michele Babchuk. Photo contributed
COMMENTARY: MLA Michele Babchuk talks the future of forestry

‘These forests are important to every single one of us, myself included’

Heather Gordon Murphy (l-r) and Jan Wade, chair and executive director, respectively, of the Downtown Campbell River Business Improvement Association, are working to make the city’s core a safer and more welcoming place.
Downtown Campbell River BIA working to change perceptions

Downtown Campbell River BIA is establishing nighttime security patrols and targeting beautification

Carl Sweet (left) speaks with Rod Burns before the march from Logger Mike to MLA Michele Babchuk’s office in Campbell River. The men were from two different sides of the issue of old growth logging in B.C. Photo by Marc Kitteringham / Campbell River Mirror
VIDEO: Old growth forest counter-rallies converge on the streets of Campbell River

Pro-forestry and preserve old growth supporters argue and debate in front of MLA’s office

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

“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

Police cars are seen parked outside Vancouver Police Department headquarters on Saturday, January 9, 2021. THE CANADIAN PRESS/Darryl Dyck
Vancouver police officer charged with assault during an arrest in 2019

The service has released no other details about the allegations

Denmark’s Christian Eriksen receives medical attention after collapsing during the Euro 2020 soccer championship group B match between Denmark and Finland at Parken stadium in Copenhagen, Saturday, June 12, 2021. (AP Photo/Martin Meissner, Pool)
Christian Eriksen in stable condition, Euro 2020 match resumes

Eriksen was given chest compressions after collapsing on the field during a European Championship

Members of the Department of Fisheries and Oceans’ Marine Mammal Response Program rescued an adult humpback what that was entangled in commercial fishing gear in the waters off of Entrance Island on Thursday, June 10. (Photo courtesy Marine Mammal Response Program)
Rescuers free humpback ‘anchored’ down by prawn traps off Vancouver Island

Department of Fisheries and Oceans responders spend hours untangling whale

As stories of the horrors of residential schools circulate after the Tk’emlups te Secwepemc First Nation announced it had located what are believed to be the remains of 215 children, Grand Chief Stewart Phillip of the Union of B.C. Indian Chiefs said he feels a connection with the former students. THE CANADIAN PRESS/Darryl Dyck
2 sides of the same coin: Ex-foster kids identify with residential school survivors

Grand Chief Stewart Phillip says the child welfare system takes Indigenous children from their families

Nathan Watts, a member of the Tseshaht First Nation near Port Alberni, shares his story of substance use, a perspective he said isn’t seen enough. (Photo courtesy of Nathan Watts)
Public shaming, hate perpetuates further substance use: UVic researcher

Longtime addict Nathan Watts offers a user’s perspective on substance use

Most Read