Woodside ups Australian giant gas project share by stepping in on CNPC’s sale

Australian energy giant Woodside has moved to increase its interest in an offshore development project, which is described as Australia’s largest untapped conventional gas resource, by exercising its pre-emption right to block the divestment of stakes to Japan’s exploration and production (E&P) company, Inpex.

Woodside has given notice exercising its right to pre-empt the sale of a 10.67% participating interest that PetroChina International Investment (Australia) (CNPC) holds in the Browse joint venture (BJV), including titles covering the Brecknock, Calliance, and Torosa gas fields offshore Western Australia, to a subsidiary of Inpex.

The terms of the Australian giant’s acquisition will reflect those of the CNPC/Inpex transaction, including a payment to the Chinese player of $225 million plus reimbursement of its BJV cash call contributions made between June 30, 2025, and the completion date; and the contingent payment of $175 million upon the BJV taking a final investment decision (FID) for the development of all fields on or before June 30, 2032.

The operator claims that its combined interest in the upstream Browse resource and the North West Shelf (NWS) onshore infrastructure provides the basis for an integrated development concept that it expects could deliver strong returns to shareholders across the value chain and deliver long-term economic benefits for Western Australia and the nation.

While the Browse resource is deemed to be Australia’s largest undeveloped conventional gas resource with potential production of 11.4 million tonnes per annum (mtpa) of LNG, LPG and domestic gas, the project’s location off the west coast of Australia is said to create the opportunity for a major development to supply energy to contribute towards expected LNG demand in the Asia Pacific region and provide a significant new source of domestic gas for Western Australia.

Woodside’s acquisition remains subject to customary conditions precedent, including regulatory approvals. The company’s equity interest in the BJV after completion of the acquisition will increase to 41.27%, assuming no other joint venture participant pre-empts. Liz Westcott, Woodside’s CEO, emphasized that the current levels of interest in Browse, reflected in both the CNPC/Inpex transaction and BP’s announced transaction with GS Energy, reinforce the quality and scale of the resource.

Discovered between 1971 and 2000, the Browse fields are estimated to contain a combined contingent resource of about 13.9 trillion cubic feet of dry gas and approximately 390 million barrels of condensate. An economic impact assessment by Deloitte Access Economics estimates that the Browse to North West Shelf project could contribute a long-term uplift of around A$147 billion ($102.9 billion) in gross state product for Western Australia and more than A$141 billion ($98.7 billion) in gross domestic product (GDP) nationally.

Westcott underlined: “Woodside’s decision to pre-empt reflects our commitment to continue progressing the proposed Browse to North West Shelf development. We see this as a pathway to maximise long-term shareholder value. Browse to the North West Shelf remains an important growth option for Woodside. This acquisition is a disciplined and capital efficient way to align integrated value in these assets for a development with long-term cash flow potential.

“We will continue working with the Browse Joint Venture to fully evaluate development opportunities. This includes advancing technical definition, commercial arrangements and regulatory approvals. Any investment decision will be made in accordance with Woodside’s capital allocation framework.”

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