Chevron does not want to invest in the construction of U.S. LNG plants, as it is not the best use of the company’s capital and it can easily sell its U.S. gas, said a top official on Thursday.
The head of Chevron’s midstream, Colin Parfitt, also ruled out taking an equity stake in Woodside Energy’s impending purchase of Louisiana-based Driftwood LNG.
“We chose not to do the owning and operating but we do deals that allow us to have production of gas in the U.S. and translate it into LNG for our customers,” Parfitt said in an interview.
Woodside has said it is prepared to sell up to 50% stake in the proposed 27.6 million tons per annum Driftwood liquefied natural gas project.
The U.S. is unique in that Chevron can monetize its gas production without having to convert it to LNG since the country had a large midstream market.
One of the ways that Chevron plans to benefit from LNG output in the U.S is through sales and purchase agreements with LNG developers. It has separate agreements with Cheniere Energy and Venture Global LNG, the latter of which has been in contract disputes with big customers.
“I have sat with Venture Global in the past and I am very well aware of the noise that’s out there. Our view is if we have an issue with a supplier then we talk to them and we do talk to Venture Global very directly,” Parfitt said.
Large projects are prone to delays and the Biden pause on export reviews that held up LNG export approvals to non FTA countries will also slow down the next phase of projects, Parfitt said.
(Reporting by Curtis Williams in Houston)