Woodside Petroleum Ltd. has reported it expects to enter front-end engineering and design phase for the proposed Browse floating LNG (FLNG) development in mid-2015. Partners BP PLC, Japan Australia LNG, PetroChina, and Royal Dutch Shell PLC have all agreed to the revised schedule.
Woodside said the delay will take into account the substantial shift in market conditions that will enable the joint venture to seek significantly lower cost outcomes for the Browse project.
Woodside Chief Executive Officer Peter Coleman said the time will be used to maximize long-term economic benefits for the development.
“The JV intends to take the opportunity to go back to the shipyard, the designers and the suppliers and make sure they are beginning to put some of the cost reductions into the numbers that they’re showing us,” he said.
“We don’t want to move forward with Browse at this point and miss the opportunity of locking some lower prices into our cost,” Coleman added.
Additional activities to be undertaken leading up to FEED include progressing primary approvals for the project, managing the impacts of the maritime boundary changes affecting the Browse retention leases and additional technical work to optimise and derisk the development.
A final investment decision for Browse FLNG is scheduled for mid-2016.