Woodside flags $720 mln Kitimat LNG investment charge

Australia’s Woodside Petroleum on Tuesday said its financial results will take a $720 million hit on its Kitimat LNG investment. 

The company said it will recognize a non-cash impairment in relation to the Kitimat assets in Western Canada.

Kitimat remains a world-class project and Woodside will continue to evaluate actively future development opportunities, including optimization of gas supply into processing facilities, the company said in its statement.

However, 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.

Calculation of the 2019 final dividend, to be announced on February 13, together with Woodside’s financial statements for the full-year ended December 31, 2019, will exclude the impact of this impairment on net profit after tax.

The company noted in September last year that it intends to reduce its stake in the Kitimat LNG project. The proposed terminal will consist of a natural gas liquefaction plant and the associated infrastructure and port facilities, including natural gas delivery, liquefaction, LNG storage, and LNG send-out facilities inclusive of marine off-loading.

The liquefaction plant would consist of two liquefaction trains with up to 6 mtpa production capacity each with an option for a third liquefaction train of the same capacity. The commissioning of the Kitimat LNG Terminal is anticipated to be no later than 2029.