* Woodside says to consider other floating LNG, other
* WA govt wanted onshore plant for jobs boost
* Australia on track to become world's biggest LNG exporter
PERTH, April 12 Woodside Petroleum on
Friday shelved plans for the $40 billion Browse liquefied
natural gas project in Western Australia, saying the massive
onshore development did not make economic sense.
Browse LNG was to be Woodside's biggest LNG development yet,
but has been plagued by controversy over its proposed location
at James Price Point on the northwest coast.
A series of cost blowouts on Australian LNG projects has
rattled investors, while the proposed site has also been opposed
by some environmentalists and Aboriginal landowners. Some
analysts believe its cancellation spells an end to new onshore
gas projects in Australia.
Woodside said it would immediately begin evaluation of other
options including a floating LNG plant, pipelines to existing
facilities elsewhere in the region or a smaller onshore plant.
Woodside owns a 31 percent stake in Browse, which it is
developing with partners Royal Dutch Shell, BP Plc
, PetroChina Mitsui & Co and
Estimates of the cost of the onshore plant option vary, but
some analysts estimate that if it is on par with other LNG
plants underway, such as Chevron Corp's Gorgon plant, it
may be as high as $48 billion.
Analysts and industry sources have long doubted the
likelihood of the James Price Point proposal going ahead given
cost blowouts on other LNG projects and opposition to the site.
"This decision will surprise few as the proposed onshore
development always looked too economically, technically,
environmentally and socially risky for too little reward,"
analysts at Macquarie said in a note.
"While the JV appears to have finally seen sense, this
decision probably also calls an end to greenfield onshore
projects in Australia."
Of seven LNG plants under construction in Australia, all of
which are due to come online in 2014 or later, four have already
announced cost blowouts ranging from 15 to 40 percent.
A person with knowledge of the joint venture partner
discussions said Shell had been pushing the partnership to go
with a floating LNG option given the high costs of an onshore
The decision to shelve the project is a blow to West
Australia's premier, Colin Barnett, who won reelection last
month and has been a vocal proponent of establishing a gas
export hub at James Price Point, with Browse LNG as the