Kitimat LNG partner takes $720-million writedown of project and gas fields

Kitimat LNG partner takes $720-million writedown of project and gas fields
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CALGARY — A partner in the proposed Kitimat LNG project on the B.C. coast warns that it will record a $720-million after-tax writedown on its investments in Western Canada.

Australia-based Woodside Petroleum Ltd. says the charge against 2019 earnings reflects uncertainty in timing of when it will be able to develop its natural gas fields in northern B.C. to feed the planned liquefied natural gas export terminal.

The proposed project would super-cool and ship out as much as 2.3 billion cubic feet of gas per day.

In December, California-based Chevron Corp., the operator of the project, announced it would try to sell its 50 per cent stake in Kitimat LNG while cut funding to its gas-related ventures.

Chevron is not the first company to want out of Kitimat LNG. It bought its 50 per cent stake from Calgary-based Encana Corp. and Houston-based EOG Resources, Inc., in December 2012.

In the same transaction, Houston-based producer Apache Corp. raised its stake in Kitimat LNG from 40 per cent to 50 per cent. But two years later, under pressure from activist investors, it sold that stake to Woodside.

Woodside said Tuesday that the impairment “reflects increased uncertainty, particularly in the timing of the development of the upstream Liard resource, following sustained depressed gas market conditions in Western Canada.”

It is to report fourth quarter and full year results on Thursday.

This report by The Canadian Press was first published Feb. 11, 2020.

The Canadian Press

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