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Joint-venture partners in Browse open to new options

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BRIDGET CARTER, GRETCHEN FRIEMANN:

  • The Australian
  • 12:00AM August 30, 2016

The one thing that the Woodside Petroleum-led Browse project has never had much of is unity among the project partners. But that may quietly be changing.

DataRoom understands that the various joint-venture partners in Browse are open to new development options for the project, and that the pipeline option floated by Woodside last week is increasingly being seen by all the partners as the most sensible plan as it stands today.

Woodside chief Peter Coleman told journalists on Friday that the option of connecting Browse to the big but ageing North West Shelf liquefied natural gas plant via a massive 1000km subsea pipeline was back on the table.

Each passing day that Browse goes undeveloped is a day closer to the point at which the gas supply into the North West Shelf starts to drop away, opening up the prospect for infrastructure that would cost tens of billions to replicate today becoming increasingly unused. That North West Shelf supply gap is expected to emerge in the early 2020s, which could dovetail nicely with a pipeline development at Browse.

The new-found unity comes as something as a surprise given the recent history at Browse, which was first discovered more than 40 years ago but has since been subject to a procession of unsuccessful development plans.

Project partner Royal Dutch Shell previously had a strong view that Browse should be the next big project developed through its floating LNG (FLNG) technology.

Such was Shell’s interest in developing Browse through FLNG that it lifted its stake in the project in 2012 by buying out Chevron for a cool $US450m, giving the energy giant a greater influence in the project.

Plans to develop Browse through an onshore LNG plant at James Price Point were subsequently scuttled in 2013, but Shell’s preferred FLNG option was then shelved earlier this year after studies found it didn’t make sense in the current environment.

There’s still some crossover in ownership between the North West Shelf and Browse, which would smooth the path for agreeing to terms that would see the Browse gas processed through the existing LNG plant.

Woodside, Shell, BP and Japan’s Mitsui and Mitsubishi all have stakes in both Browse and the North West Shelf, although North West Shelf partners Chevron and BHP Billiton both sold off their Browse interests in recent years.

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