Chevron has sparked fresh speculation about the future of the Woodside-led $40 billion Browse Basin LNG project, announcing today it would swap its 16.7 per cent share of the giant project with Royal Dutch Shell.
Shell will pay Chevron $450 million and swap its 33.3 percent interests in the Clio and Acme gas fields in the Carnarvon Basin, in return for Chevron’s Browse titles.
This will give Chevron a 100 percent interest in WA-205-P and WA-42-R blocks, which it has had success in drilling and may provide future gas for an expansion of its $29 billion two-train Wheatstone LNG project near Onslow.
Chevron tried to paint the move as shoring up its Wheatstone stocks, and would not bite on suggestions it was a vote of no confidence in the troubled Browse venture.
In a statement, George Kirkland, vice chairman, Chevron Corporation, said:
“Acquiring the remaining interests in WA-205-P and WA-42-R fits strategically with our long-term plans to grow our Wheatstone area resource base, and create expansion opportunities for the Wheatstone Project,” he said.
Melody Meyer, president, Chevron Asia Pacific Exploration and Production, said: “Australia is a key focus area for Chevron, evidenced by our investment and development of the Gorgon and Wheatstone projects, and strong exploration and appraisal program. Consolidating our Carnarvon Basin position furthers our progress towards becoming a leading liquefied natural and domestic gas producer in Australia and Asia-Pacific.”
Shell was similarly up-beat, despite the question marks the move placed over the venture, including whether Shell was looking to bulk up its stake for an eventual sale.
Andy Brown, Upstream International Director for Shell, said: “Shell is pleased to be growing its position in a major Australian gas resource and future Australian LNG supply project.
“This is a good deal, not only because it aligns with Shell’s strategy of bigger direct stakes in key gas resources, but because it also helps to simplify the ownership of the Browse gas fields.
“The Browse gas fields are a key LNG development opportunity for Australia. We’re committed to continue working with Woodside (as operator), the other JV participants and key stakeholders to secure the best possible development plan for this important resource.”
Woodside was contacted for comment.
Woodside and its partners do not expect to make a final investment decision until the first half of next year, assuming the project is viable.
The partners, including Shell, BP, BHP Billiton and Mitsui-Mitsubishi, are receiving tenders for both onshore and offshore components. They are said to be split over whether to process Browse gas at James Price Point or at existing facilities in Karratha.