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Report: Chevron in talks to sell minority stake in Canada's Kitimat LNG

Chevron Corp. is considering selling a minority stake in Kitimat LNG, a C$36 billion LNG project in British Columbia, Reuters reported March 6, citing "three people familiar with the matter."

The project, licensed for 10 million tonnes per annum of exports, is a 50/50 joint venture with Woodside Petroleum Ltd. and has the potential to become one of the largest capital investments in a Canadian energy project. The supermajor Chevron is in talks with several parties regarding the stake sale, including Petroliam Nasional Bhd., which canceled its own LNG project in British Columbia in 2017 due to challenging market conditions, the report said.

Reuters' sources also said the Canadian companies Seven Generations Energy Ltd. and Tourmaline Oil Corp. are in discussions to supply natural gas to Kitimat, with the former reportedly looking into buying a stake in the project.

Kitimat's cost, coupled with strong political opposition to building pipelines and other energy infrastructure and a recent global LNG glut, has been a cause for concern. However, rising demand from China and Southeast Asia has allayed some of the fears of export project developers, who look to it as a sign of a positive shift in the market cycle.

Chevron acquired its 50% stake in Kitimat in early 2013 from EOG Resources Inc. and Encana Corp.