Woodside pulls plug on James Price Point LNG hub

Woodside Petroleum Ltd. has decided against using the Western Australian government’s James Price Point LNG hub for development of its Browse Basin gas fields.

The company told the market Apr. 12 that the proposed James Price Point development “does not meet the company’s commercial requirements for a positive investment decision.”

Woodside said it made the decision following a review of tenders for both upstream and downstream sectors of the Browse development. The company will now meet its joint venture partners to discuss and plan a new development concept for the project.

Even so, a small door was left ajar.

The company added that it was looking into the possibility of developing a modified (smaller) plant at James Price Point as well as considering an floating LNG (FLNG) concept, or piping the gas from the field to the Burrup Peninsula to the south to link with the North West Shelf gas/LNG project. The company said it was too early to say if any of those options is commercial.

Woodside said it will propose to the JV a work program and budget for the remaining 20 months of the Retention Lease period (the leases expire at the end of 2014) and is committed to the timely development of the Browse resources.

The fields in question are Torosa, Brecknock, and Calliance which lie in the Browse basin about 300 km offshore Western Australia. They contain a contingent resource of 15.5 tcf of gas and 417 million bbl of condensate.

Woodside stressed that the decision has been a commercial one and was not governed by the environmental controversy that has raged around the James Price Point site 60 km north of Broome since its proposal several years ago.

Managing Director Peter Coleman said Woodside has been meeting the requirements of the retention lease conditions around the Browse fields which included the JV progressing the development through a front-end engineering and design process up to and including the consideration of a final investment decision (FID) by June 30.

“Woodside now believes we’ve satisfied those conditions,” Coleman said. “We’ve considered the FID and at this point we believe that it is not commercial to proceed with the James Price Point project. The cost escalation on Browse has been consistent with other projects in Australia. Unfortunately the cost escalation has been such that the total costs for Browse have resulted in the current development concept not being commercial.”

Coleman said Woodside still considered the Browse resource as world class and the JV is working to underpin the value by bringing forward the earliest possible development of the fields.

In May this year Woodside sold a 14.7% interest in Browse to Japan Australia LNG (Mitsubishi & Mitsui) for $2 billion reducing Woodside’s interest to 31.3%. This comprises 34% of the East Browse JV and 17% in the West Browse JV.

BHP Billiton has sold all its interests in the JV to PetroChina for $1.63 billion in December 2012.

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

In August 2012 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.

Related Articles

ETP unit gets FERC approval for gas exports to Mexico

03/21/2014 Energy Transfer Partners LP unit Houston Pipe Line Co. LP (HLPC) has received approval from the US Federal Energy Regulatory Commission to build a ...

Millennium Pipeline appoints president

03/20/2014 Millennium Pipeline Co. LLC has selected Joseph Shields as its president. He succeeds Rocco D’Alessandro, who held the position beginning in May 20...

Shah Deniz II, South Caucasus Pipeline contracts awarded

03/20/2014 The Shah Deniz and South Caucasus Pipeline consortia awarded project management and construction contracts for the development of Shah Deniz Stage ...

MARKET WATCH: NYMEX crude prices rise on Seaway pipeline expansion news

03/19/2014 Crude oil futures prices rose on the New York market Mar. 18 after Enterprise Products Partners LP told analysts and investors that an expanded Sea...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected