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Woodside shows appetite for Chevron’s North West Shelf LNG stake

“We have a right, we’ll look at it. Whether we participate or not is really going to depend on price.”

Mr Coleman said he expected there would be enormous interest among potential buyers in acquiring Chevron’s stake, but that not all would be permitted into the data room.

“There will be a lot of tyre-kickers coming in,” Mr Coleman said.

You don’t want your neighbours to put up the ‘for sale’ sign and then get the wrong people move in next door.

Peter Coleman, Woodside CEO

“They [Chevron] will run an orderly process, they will decide who they want to come into the data room and not the other way around.”

Chevron’s sale talks come as the North West Shelf runs out of natural gas and begins the transition to becoming a tolling facility, which will process gas into LNG for third-party companies. Saul Kavonic, an oil and gas analyst with Credit Suisse, estimated Chevron’s stake in the project could be worth as much as $5 billion.

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Woodside is considered by some in the industry to be a likely buyer. Mr Coleman on Tuesday said he believed an infrastructure investor would be a logical acquirer of the stake rather than an oil and gas producer.

The North West Shelf is jointly owned by Woodside, Chevron, BHP, BP, Shell and Mitsubishi.

In Australia and around the world, oil and gas producers have been hit hard by coronavirus travel restrictions wiping out demand for petrol and jet fuel on a never-before-seen scale. A supply glut which has sent global oil prices plunging to historic lows has begun flowing through to the market for LNG – one of Australia’s most lucrative exports – and battering some of the biggest energy stocks on the ASX.

There is uncertainty over how deep and long-lasting the downturn will be for the nation’s $50 billion-a-year LNG export industry. BP believes oil and gas prices may never fully recover from the downturn, particularly as the world moves further towards loosening its dependence on fossil fuels in favour of cleaner energy sources.

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However, the Australian head of ExxonMobil, Nathan Fay, on Tuesday said the company was seeing “green shoots of recovery” from the oil downturn as cars began returning to the road, and expressed confidence in the long-term demand outlook for gas as it continued displacing coal-fired power.

“By 2040 we see gas contributing around 26 per cent of the global energy supply, up slightly from about 23 per cent today,” he said.

Mr Fay said gas demand forecasts varied from a 25 per cent reduction to a 50 per cent increase under a range of scenarios to limit global warming to 2 degrees in line with the Paris climate agreement. But due to existing oil and gas fields depleting, the world would still require a substantial amount of investment in new supply either way, he said.

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