What Does the Future Hold for Australia's Browse Natural Gas Fields?

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Researched by Industrial Info Resources Australia (Perth, Australia)--A month after the announcement by Woodside Petroleum (ASX:WPL) (Perth, Australia) that the Browse LNG project will not go ahead at James Price Point in Western Australia, a deal has been made between Royal Dutch Shell's (NYSE:RDS.A) (The Hague, Netherlands) regional business, Shell Development Australia (Melbourne, Australia), and Woodside to look into floating liquefied natural gas (FLNG) technology for the exploitation of the massive Browse assets.

The hydrocarbon-rich Browse resource, which includes the Brecknock, Calliance and Terosa fields (likely to be developed in stages), which are about 290 kilometres off the Kimberley coast in Western Australia, could become the site of a FLNG facility similar to the breakthrough Prelude project. The push for utilizing FLNG technologies to commercialize the Browse fields began around the beginning of this year, ahead of the April 12 declaration that a positive final investment decision (FID) would not be reached for the land-based, 12 million-metric-tonne, LNG-capacity foundation phase project.

The unsuccessful outcome came after many years of project development that saw a substantial number of engineering companies invest years of service, along with the highly skilled and devoted Woodside team and many suppliers and contractors bidding for work on the estimated $40 billion project. The James Price Point development concept, as it stood, was deemed to be commercially unviable. Woodside did not divulge the total anticipated project cost at the press conference last month; however, analysts expected the total investment value (TIV) to be about $60 billion.

Earlier this month, Michael Hession resigned from his executive role in charge of the Browse project. Hession spent three and a half years working on the project. Steve Rogers will step into the role of Browse's senior vice president. Rogers prior role was senior vice president of the stalled, Woodside-operated Greater Sunrise project.

The press conference on April 12 was held by Woodside to announce to the public that the project would not advance with the then-current development plans.

Peter Coleman, Woodside CEO and managing director, mentioned that the Browse field development has been on the agenda for nearly 40 years. The first well was drilled in 1971, and the last of the major fields was discovered in 2000.

At the press conference, Coleman made the following comment regarding the best option for Browse resource development: "Everybody now has a sense of urgency to continue the momentum on Browse. We've got the project teams in place, we've got the will of the organisation, and we've got an aligned joint venture. Now is really the best time for us to move forward with alternative development options on Browse."

FLNG, a pipeline to existing LNG facilities in the Pilbara, or even a smaller onshore option at James Price Point are all alternatives to the massive James Price Point LNG Hub that was cancelled after a thorough and expensive Basis of Design, front-end engineering and design (FEED) and environmental permitting process.

The best-case scenario will see a final investment decision made on a new Browse development plan in about two years.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.