Skip to main content
Open this photo in gallery:

Woodside is seeking to reduce its stake in Canada’s Kitimat liquefied natural gas project.David Gray/Reuters

Australian oil and gas producer Woodside is seeking to reduce its stakes in the Scarborough gas field at home and in Canada’s Kitimat liquefied natural gas (LNG) project to cut its capital exposure, its chief executive told Reuters on Tuesday.

The comments by CEO Peter Coleman came after speculation Saudi Aramco could be interested in Scarborough, a gas resource that, once developed, would feed into and expand Woodside’s Pluto LNG production and export facility.

Woodside holds a 75 per cent stake in the Scarborough gas field and 50 per cent of the Kitimat project in Canada, which is operated by Chevron.

“We just look at that and say from a capital management and risk-management point of view we would rather hold less equity,” Mr. Coleman told Reuters. “It also helps us fund through this next expenditure cycle if we can reduce our capital requirement.”

“In a major project where we are operating, we would like to be between 40 per cent and 60 per cent equity. It kind of makes sense. When you’re non-operator, anywhere between 20 per cent and 40 per cent is the right number,” he said.

Of Aramco’s potential investment, he said it would be “no secret” if the company were interested in projects in Australia, but did not elaborate further.

Woodside wants to take a final investment decision on developing the $11-billion Scarborough field in 2020 but warned last month it was at the mercy of its partners to lock down some of its projects plans.

The company is in talks with its 25 per cent partner BHP Group on how much to charge for processing Scarborough gas through the Pluto LNG plant.

The gas from Scarborough could prompt the building of Pluto LNG II, a 4-5 million tonne a year (mtpa) facility.

Pluto produces 5 mtpa, contributing to Australia’s LNG exports which vie for the top spot with Qatar, long the world’s largest LNG supplier.

In Canada, Chevron and Woodside are yet to propose a date for a final investment decision on the Kitimat LNG project, having expanded its planned size to 18 mtpa in April.

Last year, Royal Dutch Shell began building its 14 mtpa LNG Canada plant just 20 kilometres away from the Kitimat site.

Report an editorial error

Report a technical issue

Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 7:00pm EDT.

SymbolName% changeLast
CVX-N
Chevron Corp
+0.89%157.74

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe