From the SMH blog:
Woodside Petroleum has confirmed plans to develop its large Browse gas fields off the Kimberley coast using up to three huge floating LNG vessels in a project that would have a life span of up to 50 years.
In a draft environmental impact statement for the venture, released this morning, Woodside said the floating LNG design was the “most likely commercially viable option” to develop its three Browse fields, the first of which was found over 40 years ago.
The release of the draft EIS comes as Woodside seeks to reach a joint venture decision this year with its partners to start engineering design work on the project, expected to cost more than $40 billion. Chief executive Peter Coleman is targeting a final go-ahead for the project in the second half of 2015 but it remains unclear whether all the venture partners want the venture to proceed that rapidly.
…Woodside’s partners in the project include Shell, whose FLNG technology will be used at the venture, BP, PetroChina and a venture between Japanese trading houses Mitsubishi and Mitsui. No LNG sales contracts have yet been agreed for the project.
The last point is the most germane. No contracts have yet been signed and why would they be? Contracts are on offer in the US at $10mmBtu versus the FLNG costs that are 20-30% higher.
I’ve no idea whether Woodside will get his done but I would have thought that the potential brownfields expansion – a fourth train at Gorgon and Arrow in Queensland – are far lower risk and cost, as well as offering the advantage of improving existing investment metrics. They would surely need to sign up customers before Woodside had any hope.
