Woodside Confirms US LNG Project Exit

Woodside said August 15 in its 1H report has confirmed termination of its agreement with Sempra Energy after deciding not to pursue a potential equity investment in Port Arthur LNG.

The Australian firm had already hinted late June that it might not proceed with the investment, while Sempra in July said that Woodside was pulling out. Sempra, Woodside and South Korea’s Kogas had signed a memo of understanding to proceed with Port Arthur LNG in Texas in June 2017. 

That in turn followed an agreement in February 2016 between Sempra and Woodside to develop the 11mn mt/yr venture, originally scheduled to become operational by 2021 but now expected to start up 2023.

Sempra’s plans to press ahead with Port Arthur was confirmed by its signature in June 2018 of a heads of agreement with Poland’s PGNiG whereby the latter plans to lift 2mn mt/yr from the venture starting 2023. That same month Sempra had selected Bechtel as its engineering procurement and construction (EPC) contractor for the venture, indicating that a final investment decision was anticipated in 2019.

Woodside meanwhile, in addition to its current and planned LNG projects in Australia, said it is "supporting the proposed Kitimat LNG development in British Columbia" in western Canada - but indicated it would start up no earlier than 2027. "The joint venture continued activities to improve the competitiveness of the Kitimat LNG project, together with ongoing engagement with the British Columbian and Canadian governments," it said. Woodside has a 50% equity stake in Kitimat LNG.