Woodside, Shell closer to floating LNG
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.
Frequently Asked Questions about this Article…
Woodside Petroleum announced a framework agreement with Shell that would enable the Browse joint venture to progress floating LNG (FLNG) as a development option using Shell's FLNG technology.
FLNG stands for floating liquefied natural gas. Woodside’s CEO, Peter Coleman, said FLNG could be the leading option because it has the potential to commercialise the Browse gas resources in the earliest timeframe compared with other development concepts.
No. The article makes clear the agreement provides a framework, but any final decision to pursue FLNG still requires approval from the other Browse joint venture partners.
Woodside dropped its more than $45 billion onshore development plans for the Browse project because rising costs made that option unviable, prompting the company to consider alternatives like FLNG.
Woodside said it will immediately engage with joint venture participants about the agreement, the extent of work on alternative development concepts (including FLNG) and the obligations under the Browse retention leases.
The article notes Woodside must address obligations under the Browse retention leases as part of development planning. Retention leases are the contractual or regulatory arrangements that let the joint venture maintain rights to the resource while deciding on how to develop it, so meeting those obligations affects project timing and options.
Analysts welcomed the move away from the costly onshore plan but questioned where Woodside's future growth would come from, which helped focus attention on alternatives such as FLNG and partnerships like the Shell tie-up.
Peter Coleman indicated FLNG was the leading development option, highlighting that it had the potential to commercialise the Browse resources in the earliest possible timeframe compared with other approaches.
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