Woodside scraps plan to join Israel's Leviathan gas project

MELBOURNE Tue May 20, 2014 7:26pm EDT

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MELBOURNE May 21 (Reuters) - Woodside Petroleum Ltd , Australia's top gas producer, has ditched plans to take a stake worth up to $2.7 billion in Israel's flagship Leviathan gas project after failing to resolve a tax dispute.

Woodside's decision to walk away from buying a 25 percent stake in the project leaves the venture without the expertise in liquefied natural gas (LNG) that was critical to helping Israel become a gas supplier in the Middle East and beyond to Asia.

"All parties have worked very hard to secure an outcome which would be commercially acceptable, but after many months of negotiations it is time to acknowledge we will not get there under the current proposal," Woodside Chief Executive Peter Coleman said in a statement to the Australian stock exchange. (Reporting by Sonali Paul; Editing by Richard Pullin)

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