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Chevron to sell North West Shelf LNG stake

Chevron is planning to sell its 16.7% stake in North West Shelf (NWS) LNG, in Australia.

Commenting on the news, David Low, Senior Analyst, Wood Mackenzie, says the sale ‘makes a lot of sense’ as the facility will be coming off full production this year and going forward it will need third-party gas to keep the plant full. ‘For the NWS joint venture partners, this means an increasing proportion of tolling revenue will be generated, unless each party can monetise its own gas molecules through the facility,’ he says. ‘Chevron unsuccessfully tried to monetise the Clio/Acme asset via the NWS last year, and is unlikely to be able to monetise any of its gas through the facility in the near-term. We see this as part of the reason why its stake in the NWS is up for sale.’

In terms of buyers, there are a few likely suitors, but of the existing participants Woodside is seen as the most likely buyer as it is well-positioned financially and has announced it is ready and looking for M&A opportunities in Australia.

Low adds: ‘
We still see Australia as a strategically important part of Chevron's portfolio – it is in fact one of its most important countries in terms of remaining upstream value. Chevron will continue to focus on squeezing maximum value from its large LNG projects, Gorgon and Wheatstone, without the distractions of the NWS.’

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