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BHP Billiton sells out of Browse LNG project

BHP Billiton has sold all its interests in the Woodside Petroleum-led Browse LNG joint venture to PetroChina for $1.63 billion.

The interests comprise an 8.33% stake in the East Browse JV and a 20% interest in the West Browse JV.

BHP referred to the Browse project as a nonstrategic asset and to the sale as an excellent opportunity for BHP and for PetroChina.

The deal has yet to be finalized through the regulatory authorities. In addition other members of the JV—Royal Dutch Shell PLC, BP PLC, Mitsubishi, Mitsui, and Woodside Petroleum—do have a period of time to decide whether they will match the PetroChina offer through preemptive rights.

In August, Shell increased its interest in the Browse JV by exchanging its 33% interests in North West Shelf permits WA-20-P and WA-42-R with Chevron Corp.’s 16.7% and 20% interests in the Browse permits. It remains to be seen whether Shell will be interested in an additional stake.

Shell is known to be keen on using floating LNG (FLNG) technology to develop the Browse fields as opposed to a pipeline to James Price Point on the Kimberley coast or a pipeline down to the Burrup Peninsula to back-fill the North West Shelf Project.

This is despite the fact that the terms of the retention lease on the fields—Torosa, Calliance, and Brecknock—stipulate that development must be through an LNG plant at James Price Point.

For its part BHP did not seem keen on either FLNG or James Price Point and rumored to favor the Burrup Peninsula option. For BHP that preference is now academic.

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