Sydney, 30 April (Argus) — Australian independent Woodside Petroleum is partnering Shell on a floating LNG (FLNG) framework deal, paving the way to use the oil major's technology for the Browse LNG project after its planned onshore gas processing option was shelved.
The use of Shell's FLNG expertise has the potential to commercialise Browse the fastest and to further build the relationship between the two companies, Woodside chief executive Peter Coleman said today. Shell owns 24pc of Woodside, but has indicated previously it could sell this stake if it could receive a good price for its shares.
Woodside rejected a 12mn t/yr liquefaction plant at James Price Point on Western Australia's Kimberly coast earlier this month on the grounds it was commercially unviable. Woodside will quickly start talks with its Browse joint-venture partners, including Shell, BP and China's state-controlled oil firm PetroChina, about FLNG and how much time should be spent evaluating other development concepts.
The five-year retention lease at Browse is due to expire at the end of 2014 and Woodside is eager to have a new concept plan ready first, particularly as the Western Australian state government has expressed its disappointment that the original plan was rejected. The retention lease had required the joint venture to make a final investment decision on the James Price Point concept by 25 June this year. Australia's federal and Western Australia governments have been strong supporters of the onshore development.
The Browse project has proven and probable reserves of 15.5 trillion ft³ (438bn m³) of gas and 417mn bl of condensate in the Brecknock, Torosa and Calliance fields. The fields are located 425km north of the city of Broome at water depths up to 750m.
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