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”.
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.
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.