Woodside Petroleum has announced a tie-up with oil giant Shell in a move that indicates floating liquefied natural gas is firming up as Woodside's preferred option to develop its massive Browse gas resource.
The agreement provides a framework that would enable the Browse joint venture to progress floating LNG (FLNG) as a development option using Shell's technology.
But any decision still requires the approval of the other Browse joint venture partners.
"Woodside will 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," Woodside said in a statement to the stock exchange on Tuesday.
Woodside's decision to drop its $45 billion-plus onshore development plans for the Browse project due to rising costs was welcomed, but prompted analysts to question where the company's growth would come from. Woodside considered other development options. But comments from Woodside chief executive Peter Coleman on Tuesday appeared to confirm FLNG was the leading option. He said it had the potential to commercialise Browse resources in the earliest time frame.