SYDNEY: Australia's resources minister said Thursday he was disappointed energy giant Woodside has indefinitely shelved a more than US$40 billion gas project off the nation's west coast, hit by plunging energy prices.
Woodside's chief executive Peter Coleman said that, after a comprehensive assessment of the Browse liquefied natural gas development, "the economic environment is not supportive of a major LNG investment at this time".
Energy firms have been under the pump as diving prices for oil-related products, including LNG, have squeezed their bottom lines and forced companies to rein in spending and cut staff.
Slowing demand in Australia's top trading partner China has also hit prices for other commodities such as iron ore, ripping billions out of the government's budget and dragging on growth.
"We are disappointed by this decision from Woodside and its joint venture partners to delay the development of the US$40-billion-plus Browse project," Resources Minister Josh Frydenberg told the Australian Broadcasting Corporation.
"But we understand it's at a time when it's a very challenging energy environment and we've seen dramatic reductions in the price of oil and gas."
Other partners involved in the floating LNG joint venture include Shell, BP, Japanese consortium Mitsubishi and Mitsui, and PetroChina.
Woodside said while Browse's joint venture partners "have decided not to progress with the development at this time," it remained "committed to (Browse's) earliest commercial development".
"We will use the additional time to pursue further capital efficiencies for Browse," Coleman said.
Australia has several other LNG plants in the pipeline and is predicted to overtake Qatar as the world's biggest liquid natural gas producer by 2020.
Frydenberg said that Australia would continue to increase its export earnings in energy as the major LNG projects come online.
Australia's largest resources project -- Chevron's US$52 billion Gorgon liquefied natural gas (LNG) project off Australia's northwest coast -- began shipping this week after months of delays and cost overruns.