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Woodside confident JV will back Browse plan, seeks clarity on Leviathan
August 21, 2013 / 5:17 AM / 4 years ago

Woodside confident JV will back Browse plan, seeks clarity on Leviathan

The Woodside Petroleum Karratha Gas Plant on the North West Shelf Venture in Western Australia is seen in this undated handout photograph obtained July 24, 2009. REUTERS/Woodside Petroleum Ltd/Handout

PERTH (Reuters) - Woodside Petroleum (WPL.AX), Australia’s biggest oil and gas company, said on Wednesday it is confident its joint venture partners will back a plan for a floating LNG plant to develop the Browse gas project.

Woodside, which earlier reported a small dip in its first-half underlying net profit, aims to make a final investment decision on Browse in mid-2015 after scrapping a $45 billion onshore proposal as too costly and opting for a cheaper floating plant.

“We feel quite confident that we will receive joint venture approval of that in the not too distant future,” Woodside CEO Peter Coleman told reporters and analysts. “We expect all of the JV partners will be supportive.”

Woodside has already signed on Shell, a joint venture partner and considered to be the global front-runner in floating LNG technology, to develop the field. Other joint venture partners include BP Plc (BP.L), PetroChina (601857.SS), Mitsui & Co (8031.T) and Mitsubishi Corp (8058.T).

The oil and gas group said it was also seeking clarity about export arrangements for Israel’s Leviathan gas prospect, in which it has an in-principle agreement to buy a 30 percent stake for $1.25 billion.

Potential plans by Israel’s government to limit exports or route exports of gas through Turkey could make the Leviathan deal less attractive.

Israel’s high court will sit on September 17 to consider the export arrangements, and the finance ministry is expected to complete a review in October, Coleman said.

“We don’t have a sense how long the court will take, but we believe it will be weeks rather than months,” he said.

Woodside, which operates the giant North West Shelf gas project, reported a 1.5 percent fall in half-year net profit, as lower prices and increased costs more than offset record first-half production, slightly missing expectations, one analyst said.

Many of Woodside’s contracts from its North West Shelf and Pluto LNG plants will be renegotiated through 2014.

Coleman said Woodside had reached in-principle agreement on a number of LNG supply contracts, which would be finalized in the coming weeks, and was pleased with progress so far.

The company maintained its production target for 2013 of 85 to 89 million barrels of oil equivalent (MMboe), after cutting the target from an earlier 88 to 94 MMboe in July.

Woodside said a 7.6 percent rise in operating revenue to $2.86 billion, a record for the first half, was largely due to a full half-year of production from its Pluto LNG plant despite an unplanned outage at the facility.

Woodside shares fell 2.1 percent, against a 0.5 percent gain in the broader market. The stock is up about 13 percent so far this year.

(This story amends paragraph two to clarify reference is to “underlying net profit”)

Reporting by Rebekah Kebede, Jane Wardell and Maggie Lu Yueyang; Editing by Richard Pullin

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