Australia’s Woodside has entered into an agreement with Shell that sets out the key principles that would apply if the Browse resources are developed using Shell’s Floating LNG (FLNG) technology.
The agreement provides a framework that would enable the Browse joint venture to progress FLNG as a development concept.
Woodside said it would immediately engage with the joint venture participants regarding the agreement, the extent of work on alternative development concepts and the obligations under the Browse retention leases. The selection of any development concept requires approval by the Browse joint venture participants. Woodside CEO Peter Coleman said FLNG had the potential to commercialise the Browse resources, comprising three gas and condensate fields, Brecknock, Calliance and Torosa, 425 km north of Broome off the Kimberley coast, in the earliest possible time frame and to further build the company’s long-standing relationship with Shell.
“This agreement enables Woodside, as operator of the Browse LNG Development, to strengthen our development and operational capabilities through the potential use of Shell’s “Design One Build Many” FLNG technology,” Coleman said.
“It also provides the opportunity for Western Australia to become an industrial, operational and technology centre for excellence for floating LNG worldwide.”
On April 12, Woodside announced it was not going ahead with the proposed onshore development of Browse LNG at James Price Point near Broome, saying that the development concept does not meet the company’s commercial requirements for a positive final investment decision.
Premier of Western Australia, Colin Barnett, greeted the news that Woodside would not proceed with the James Price Point option with disappointment.
“While I acknowledge that this was a commercial decision by Woodside and its joint venture partners, I am bitterly disappointed,” Barnett said.
“Developing this huge natural resource, which is owned by all Australians, offshore is not in the best interests of the nation or the people of WA,” he said.
While FLNG will deliver royalty income and there will be some jobs for WA in servicing the project, there is no doubt this is a missed opportunity to secure thousands of jobs in construction and in the operation of a gas precinct and to secure gas for our domestic economy,” he said.