News that energy giant Chevron is selling its 50 per cent stake in Kitimat LNG has been met with mixed reactions locally.
Chevron announced it was withdrawing from the project on December 10, saying in a statement that the decision is part of Chevron’s effort to optimize its global portfolio and focus on “improving returns and driving value.”
“Although Kitimat LNG is a globally competitive LNG project, the strength of Chevron’s global portfolio of investment opportunities is such that the Kitimat LNG Project will not be funded by Chevron and may be of higher value to another company.”
Skeena riding MLA Ellis Ross, official opposition critic for LNG and Resource Opportunities in the B.C. Legislature, said while proponents have pulled out of other LNG projects, Kitimat LNG’s position was unique.
“It’s unusual for major projects like this to only have two partners. Most have four or five,” said Ross. “We’ve heard this type of announcement before and not just from this project. It’s just a matter of watching for clues and updates in the coming months.”
District of Kitimat mayor Phil Germuth said while he was surprised to hear that Chevron would be withdrawing from the project, he still believes the project is viable.
“Of course we were surprised by Chevron’s announcement, but I think the Kitimat LNG project is still a tremendous opportunity for another proponent to move forward with,” said Germuth.
“This project is engineered to be cost-competitive and the lowest greenhouse gas-producing LNG facility in the world. I still see this project moving ahead and look forward to welcoming the new proponent into our community.”
He added that the District would work with Chevron and Woodside to support the transition of the project to future owners.
He said Kitimat was still on track to becoming one of Canada’s premier ports connecting with global markets as LNG Canada ramps up construction activity on its facility.
Haisla Nation Council (HNC) chief councillor Crystal Smith said the HNC would continue to support the project, which will be built on traditional Haisla territory, should it receive a positive final investment decision.
“Haisla Nation Council recognizes that ownership changes are common in large capital energy projects. This is not the first time this project has changed hands and we are comfortable and confident that we will build a positive, working relationship with a new proponent, should ownership change hands,” said Smith.
“Kitimat LNG was the first LNG export project to reach out to the Haisla Nation and our community supported it, in a referendum, by more than 90 percent,” said Smith.
While Chevron has announced the company is looking to sell its 50 percent ownership in the project, as the managing partner until there’s a sale, Chevron will continue to work with its partner, Woodside Energy, to advance KLNG towards a final investment decision, added Smith
She said despite the announcement it is “business as usual for KLNG” with work on the Bish Cove site continuing, while the HNC continues to focus on reviewing the proposed changes resulting from increasing the capacity of the project by more than 50 percent of the original design.
The Kitimat Chamber of Commerce said in a statement last week that while the decision to sell its share in the project was unexpected, the Chamber was still fully behind Kitimat LNG.
“We respect Chevron’s decision to cut their spending on some of their investments and thank them for their commitment to continue to work with their partner Woodside and other proponents, until another company purchases Chevron’s shares for the Kitimat LNG project,” read the statement.
Chevron said in its statement that the company while it would be “soliciting expressions of interest for its interests in the Kitimat LNG project,” no timeline has been set to conclude the process.
“This decision only impacts Chevron’s interests in the Kitimat LNG Project. Chevron’s other assets in Canada are not included in this decision.”
The company said it was focusing on reducing funding to various gas-related ventures – including Appalachia shale, Kitimat LNG and other international projects.
“Chevron is evaluating its strategic alternatives for these assets, including divestment,” reads the statement.
