SYDNEY: Shell has agreed to sell its 27% stake in the long-delayed Browse gas project off Western Australia to BP, the two companies said on Saturday, without disclosing the price.
The estimated A$20.5 billion ($13.78 billion) Browse project, Australia’s largest untapped gas resource, has been stuck on the drawing board for years but is now being considered as a replacement for ageing gas fields to supply the North West Shelf LNG (liquefied natural gas) plant.
In a statement issued on Saturday, Shell Australia said it “regularly assesses its portfolio to inform capital allocation and maximise returns and performance however, the Browse asset is no longer a strategic fit in the context of Shell’s global portfolio”.
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BP said in a separate statement it was proposing to buy Shell’s share of the project, which, if approved, would take BP’s stake in it to 44%.
“BP believes development of the Browse gas resources could make a significant contribution to energy security in Australia and to the Asia Pacific region,” a BP spokesperson said.
The company said it supported the concept of processing Browse gas in the North West Shelf LNG plant.
“Browse, with Carbon Capture & Storage (CCS), can help underpin the energy system of today while we invest in and build the energy system of tomorrow,” the spokesperson said.
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No deal price was mentioned by either company.
In 2012, Japan’s Mitsui & Co and Mitsubishi Corp together paid $2 billion for a 14.4% stake in Browse, while PetroChina bought a 10.67% stake for $1.63 billion.
Operator Woodside Energy Group Ltd owns 30.6%.
The Sydney Morning Herald had reported earlier this month that BP was in talks to buy Shell’s stake in the carbon-intensive development, in a sign that the two global oil and gas producers had differing views about the project.
Woodside last week played down concerns over the status of the long-stalled Browse project after the company reported a decline in first-quarter sales revenue relative to the December quarter.
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