Woodside has decided to put its Browse (SEN, 32/19) FLNG project off Australia on ice after completing front-end engineering and design (FEED) work on the scheme.
Woodside said the Browse joint venture participants have decided not to progress with the development because of the current economic and market environment.
The Woodside-led Browse project, which counts Shell, BP, Japan Australia LNG and PetroChina as its partners, is located 425 km north of Broome in Western Australia and was earmarked to produce 12 million tonnes per annum of gas.
The project’s reference case is based on three FLNG facilities to develop the Brecknock, Calliance and Torosa fields in the Browse Basin.
Woodside said, “Since FEED entry, Woodside has been focused on delivering targeted cost savings and value enhancements. While significant progress was made to improve project value, this has been offset by an extremely challenging external environment.”
Woodside CEO Peter Coleman acknowledged the high quality of technical and non-technical work completed on the Browse FEED programme to enable the Browse Joint Venture participants to reach this decision.
“We have undertaken a comprehensive and rigorous process to assess all elements of the development. The decision represents a disciplined approach to large-scale capital investment and is consistent with our requirements for a development concept to be commercially robust across a range of scenarios.
“Woodside remains committed to the earliest commercial development of the world-class Browse resources and to FLNG as the preferred solution, but the economic environment is not supportive of a major LNG investment at this time. Accordingly, we will use the additional time to pursue further capital efficiencies for Browse,” he said.
Woodside said it will now work with the Browse joint venture participants to prepare a new work programme and budget to progress development activities.
The company said it intends to leverage the high quality work delivered to date, which includes the involvement of the State Government to agree key principles for domestic gas and supply chain arrangements and the State and Commonwealth Governments to manage maritime boundary changes.
“Woodside remains focused on satisfying its work programme commitments under the Browse retention leases. The Browse retention leases were renewed in 2015 and the current term of the leases ends in mid-2020,” the company added.
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