Chevron to Divest its Stake in North West Shelf LNG JV
Potential suitors to acquire Chevron’s stake in the LNG project include co-owner and operator Woodside.
After receiving several unsolicited inquiries from potential buyers, Chevron said it is looking to sell its 16.7% stake in Australia's A$34 billion ($23.3 billion) North West Shelf (NWS) LNG joint venture.
The NWS project has been operating for 35 years and supplies oil and gas to Australian and international markets from offshore gas, oil, and condensate fields in the Carnarvon Basin, off the northwest coast of Australia. It is also the largest producer of domestic gas for western Australia.
Operated by co-owner Woodside, other partners in the JV include BHP, BP, Japan Australia LNG, and Shell.
"Chevron is continuing to high-grade its portfolio, and putting its 16.7% stake in the NWS up for sale makes a lot of sense,” said Wood Mackenzie senior analyst David Low. “We see the NWS facility coming off full production this year, and going forward it will need third-party gas to keep the plant full.”
Low said for the NWS JV partners, this means an increasing proportion of tolling revenue will be generated, unless each party can monetize its own gas molecules through the facility.
Low adds that part of the reason for the divestment may also be due to Chevron’s unsuccessful attempt to monetize the Clio-Acme fields asset via the NWS, and monetization is unlikely in the near term.
The Wood Mackenzie analysts said infrastructure investors such as Woodside would be likely suitors for Chevron’s stake. However, Forbes said it is also possible the other JV partners would follow Chevron’s lead, leaving Woodside as the dominant investor.
Although it plans to divest its NWS stake, Chevron said it remains committed to its Gorgon and Wheatstone LNG projects in western Australia.