Woodside Says Open to Extra Equity in Browse LNG

Source: Reuters 12/2/2009, Location: Not categorized

Australian oil and gas firm Woodside Petroleum Ltd would consider boosting its stake in the joint venture Browse liquefied natural gas (LNG) project if its partners could not agree on a development plan, it said.

The Australian government on Wednesday gave Woodside and its four partners, BP, Chevron, Royal Dutch Shell and BHP Billiton, a four-month deadline to agree on a plan for the project or lose leases for the gas fields.

But Woodside, operator and 50-percent owner of Browse, and the four have so far been unable to agree on where to build the project's processing plant, giving rise to speculation some of the partners may sell their stakes.

"We like the project a lot and we want to re-emphasize that we want all the participants to come with us. But if they don't, we'll be happy to take on more equity because we like it so much," Chief Executive Don Voelte told an analyst briefing.

Voelte said he was very optimistic a deal would soon be reached, and added there are provisions should one or two partners decide to withdraw.

The partners now have 30 days to accept the government's lease renewal offer, Voelte said, but Woodside has not yet had discussions with its partners.

Woodside has been pushing for a plant for Browse gas to be built in the Kimberley region of western Australia.

But the partners prefer to use the gas for their nearby North West Shelf LNG facility when reserves at that project start running out in the next decade.

Voelte said the economics of building the plant in the Kimberley were robust, but would not give a cost estimate. Analysts have estimated the whole Browse project could cost A$30 billion ($28 billion) but Shell has estimated it A$50 billion.

First LNG production from Browse could start in around 2016-2017 if it was approved in 2012, Woodside said.

Woodside first made the Browse discovery about 40 years ago and the fields are estimated to hold 14 trillion cubic feet of gas and 370 million barrels of condensate.

He also said he was confident that PetroChina Co.and Taiwan's CPC Ltd would remain the project's first customers.


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