PERTH, April 30 Australia's Woodside Petroleum
Ltd has signed a preliminary technology agreement with
shareholder Royal Dutch Shell to develop its Browse gas
field using Shell's floating liquefied natural gas (LNG)
technology in case it finally opts for that route.
The agreement, which Woodside announced on Tuesday, boosts
expectations it will eventually use floating LNG to tap the
Browse gas field. It comes on the heels of the Australian
company's decision to scrap plans to build a $45 billion onshore
plant to tap the resource due to its high cost.
Woodside has outlined several potential development options
for Browse, including a smaller onshore plant, but the company
is widely expected to choose floating LNG to develop the Browse
Floating LNG has "the potential to commercialise the Browse
resources in the earliest possible time frame", Woodside chief
executive Peter Coleman said, according to a company statement.
Shell, which owns 24 percent of Woodside and is the
second-largest shareholder in Browse, is considered to be the
global frontrunner in developing floating LNG technology and has
lobbied for the Browse gas field to be developed.
Other joint venture partners include BP Plc,
PetroChina, Mitsui & Co and Mitsubishi Corp
According to analyst estimates, choosing to use floating LNG
technology would mean a cost savings of 20 percent.
Ballooning costs have become a major challenges for LNG
developers in Australia.
With $190 billion worth of LNG projects underway, the
country is set to become the world's largest LNG exporter by the
end of the decade, but more than half of the seven LNG plants
currently under construction have had cost blowouts ranging from
15 percent to 40 percent.