bp has agreed to acquire Shell Australia’s 27% interest in the proposed US$20 billion Browse LNG project offshore Western Australia, adding to its existing 17.33% interest in the Woodside Energy Ltd.-operated project.
Upon deal completion, subject to regulatory approval, bp will move to a 44.33% interest, larger than Woodside’s 30.6% share.
The deal value was not disclosed.
In a statement, Shell said the company “regularly assesses its portfolio to inform capital allocation and maximize returns and performance, however, the Browse asset is no longer a strategic fit in the context of Shell’s global portfolio.”
The Browse project encompasses proposed development of three gas fields (Torosa, formerly Scott Reef; Brecknock, and Calliance) in the Browse basin about 425 km north of Broome off Western Australia’s northwest coast.
Scott Reef was discovered in 1971, Brecknock in 1979, and Calliance in 2000. The fields lie in water depths of 35-700 m. Reserves in the early-Mid Jurassic Plover formation reservoirs have been estimated to hold more than 20 tcf of gas and 360 million bbl of condensate.
Numerous development options have been mooted in the last decades, including floating LNG (FLNG). The current proposal is for deployment of two floating production storage and offtake vessels (FPSO) and a suite of subsea wells and gathering pipelines connected to a main 900 km underwater trunk line to Woodside-operated North West Shelf (NWS) LNG and domestic gas infrastructure on the Burrup Peninsula near Karratha on the Pilbara coast.
The plan would serve to backfill the NWS plant to replace declining supply from depleting North West Shelf fields. The proposal is expected to produce over 11 million tonnes/year of LNG/LPG along with a supply of sales gas into Western Australia’s domestic market.
While the joint venturers continue to assess alternative development options, a carbon, capture, storage (CCS) reinjection scheme is likely to be part of any final development plan. The fields contain up to 12% CO2.
It is believed the Woodside-led JV is now aiming to begin front-end engineering and design late this year or early 2024, leading to a final investment decision in 2025.
Upon completion of a deal, Woodside would remain as operator with 30.6%. Partner interests would be bp with 44.3%, Mitsui-Mitsubishi (MiMi) with 14.4%, and Petrochina with 10.7%.
Woodside, bp, MiMi, and Shell are interest holders in the NSW Karratha plant along with Chevron.