Shell exiting Australia’s ‘largest untapped conventional gas resource’ project as BP boosts its stake
UK-headquartered energy giant BP is in the process of enlarging its interest in a natural gas project offshore Australia while Shell Australia, a subsidiary of the oil major Shell, is heading for the exit.
Shell reported on Saturday, 29 April 2023, that it had signed an agreement with BP to sell its interests in the Browse project, subject to regulatory approvals. According to the oil major, Browse remains “an important Australian resource which if developed will provide much-needed energy to customers as the energy market transitions towards lower carbon energy.”
Woodside is the operator of the Browse project on behalf of the Browse Joint Venture, which comprises Woodside Browse (30.60 per cent), Shell Australia (27 per cent), BP Developments Australia (17.33 per cent), Japan Australia LNG (MIMI Browse) (14.40 per cent), and PetroChina International Investment (Australia) (10.67 per cent).
While Shell claims that it regularly assesses its portfolio to inform capital allocation and maximise returns and performance, the energy giant is of the opinion that the Browse asset is “no longer a strategic fit” in the context of its global portfolio.
To bring the Browse project to life, Woodside proposes developing the Brecknock, Calliance and Torosa fields, located approximately 425 km north of Broome in the offshore Browse Basin. The hydrocarbon resources contained in these fields are predominately gas, with contingent resources (2C, 100 per cent) of 13.9 trillion cubic feet (tcf) of dry gas, and approximately 390 million barrels of condensate.
In September 2018, the Browse JV selected the Browse to North West Shelf (NWS) project development concept to progress into the concept definition phase. In addition, a range of options to manage greenhouse gas emissions is being evaluated. A feasibility assessment is being progressed for a carbon capture and storage solution and opportunities to improve energy efficiency.
Moreover, the NWS proposed development concept entails subsea infrastructure, two floating production storage and offloading (FPSO) vessels delivering 11.4 Mtpa of LNG/LPG and domestic gas; and an approximately 900 km pipeline to the existing NWS project infrastructure, which will tie in near the existing North Rankin Complex (NRC) in Commonwealth waters.
In September 2022, Woodside published the final Environmental Impact Statement (EIS) for the proposed Browse to NWS project as directed by the Australian Department of Climate Change, Energy, the Environment and Water (DCCEEW).
Based on the operator’s statement at the time, the proposed Browse to NWS project would send feed gas from fields in the offshore Browse Basin to be processed at the NWS project’s Karratha Gas Plant. Woodside describes Browse as Australia’s “largest untapped conventional gas resource.”