WOODSIDE'S A$45BN LNG DEAL WITH PETROCHINA RUNS OUT OF GAS

飞雪寒冰

Woodside Petroleum and Petro- China said yesterday that an outline agreement for the Australian energy group to supply liquefied natural gas estimated to be worth about A$45bn (US$41bn) had expired without a firm accord being reached.

The agreement struck in 2007 to supply up to 3m tonnes of LNG a year to the Chinese oil and gas group for up to 20 years was at the time hailed as potentially Australia's biggest export contract. The commercial terms of the negotiation between the parties were kept confidential, but it is understood initial plans to begin gas sales to PetroChina from 2013 were not feasible.

Woodside and its partners are not expected to reach a so-called final investment decision on the proposed Browse venture in Western Australia – the project that would have supplied Petro-China – until the middle of 2012. The first gas shipments are unlikely until a few years after that.

The Browse project is expected to cost about US$30bn to build and is a world class resource. It is forecast to initially produce close to 12m tonnes of LNG a year.

令飞

wonderful！{:5_633:}

飞雪寒冰

It has reserves of 14,000bn cubic feet of gas and 370m barrels of condensate, a form of light oil.

Browse and other projects are expected to strengthen Australia's increasingly strong role in the global LNG industry.

Chevron last year said it would consider a big expansion of its Gorgon natural gas project off the Western Australian coast, after the US oil group and its partners approved a A$43bn initial spending programme.

Shares in Woodside were not hampered by the loss of Petro-China, closing 33 cents higher at A$47.53 after the group updated the market on talks with other customers. Woodside said it had an agreement with Osaka Gas, the Japanese group, to “progress discussions in respect of Woodside projects, including for the potential sale and purchase of up to 1.5m tonnes of LNG per annum from Browse”.