Woodside Petroleum and partners have scrapped its plans for the struggling Browse floating liquefied natural gas (FLNG) mega project offshore Western Australia, as a result of the current economic and market environment.
Browse FLNG illustration. Image from Woodside.
The decision from the Browse joint venture partners comes after the completion of front-end engineering and design (FEED) work.
“While significant progress was made to improve project value, this has been offset by an extremely challenging external environment,” Woodside said.
According to Woodside, the JV has undertaken a comprehensive and rigorous process to assess all elements of the development.
The Browse FLNG development, which was expected to reach a final investment decision in 2H 2016, is based on three FLNG facilities utilizing Shell’s FLNG technology and Woodside’s expertise to commercialize the Brecknock, Calliance and Torosa fields.
The fields, located 425km offshore north of Broome at 300-700m water depth, are expected to contain gross (100%) contingent resources (2C) of 15.4 Tcf of dry gas and 453 MMbbl of condensate. The Torosa field, the first of the fields discovered, was found in 1971. Brecknock followed in 1979, and Calliance came later in 2000.
“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 CEO Peter Coleman said. “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.
The JV now has plans to work together to prepare a new work program and budget to progress development activities. Focus will remain on work program commitments under the Browse retention leases, which were renewed in 2015, with current term of the leases ending in mid-2020.
It is anticipated that a range of concept options will be considered, including floating LNG technologies.
This isn't the first time Woodside has put the Browse concept on hold. In April 2013, Woodside said it would not pursue its proposed Browse LNG development, citing that the concept did not meet its commercial requirements following a technical and commercial evaluation.
The Browse joint venture includes Woodside (30.6%), Shell Australia (27%), BP (17.33%), Japan Australia LNG (MIMI Browse) (14.4%), PetroChina International Investment (10.67%).