Petrol explorer Woodside Petroleum (ASX:WPL)
has announced its intention to divest its 50 per cent stake in the proposed Kitimat liquefied natural gas (KLNG) development project in Canada.
The $21.7 billion company plans to either sell its 50 per cent slice or liquidate assets, leases and agreements connected to a 471 km natural gas pipeline and the land area selected for the development of a proposed LNG processing plant .
Woodside acting CEO Meg O’Neill explained the decision, "we have decided to prioritise the allocation of capital to opportunities that will deliver nearer-term shareholder value."
The company will however maintain its involvement with Liard Basin upstream gas resource, as Woodside considers it a cost-efficient option “to investigate potential future natural gas, ammonia and hydrogen opportunities in British Columbia.”
Australia’s largest oil and gas producer’s decision to withdraw from the project followed in the footsteps Chevron’s Canadian subsidiary to the exit door.
The US oil and gas heavyweight had previously revealed it would sell the other 50 per cent interest and suspended its feasibility study on the site.
Woodside has estimated a $US40 million to $US60 million downgrade of its full-year earnings guidance, following the divestment.
Shares in Woodside Petroleum (ASX:WPL)
are trading 1.5 per cent higher at $22.86