Chevron to sell stake in North West Shelf LNG

"Chevron continuing to high-grade its portfolio and putting its 16.7% stake in the NWS up for sale makes a lot of sense. 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. For the NWS JV partners, this means an increasing proportion of tolling revenue will be generated, unless each party can monetise its own gas molecules through the facility. 

"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 we see Woodside as the most likely buyer. It is well-positioned financially and has announced it is ready and looking for M&A opportunities in Australia.

"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."