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Woodside’s Browse LNG plant suffers cost blowout

The Business Spectator - Australia, 3:38 AM, 2 Jul 2009

The costs for Woodside Petroleum Ltd’s proposed liquified natural gas (LNG) plant in the Kimberley have blown out to $50 billion, and discord between the project’s partners is growing, according to The Australian newspaper.

An informed source told the paper costs for the standalone plant, which would process gas from Woodside’s Browse fields, have blown out to $50 billion, which puts the project’s costs on par with those at Chevron Corp’s Gorgon LNG project, which has almost three times the gas reserves.

The paper said Woodside’s partners, which include BP, Chevron, Shell, and BHP Billiton Ltd, are refusing to fall in line with Woodside’s preference to build an LNG plant in the Kimberley.

Some of the partners instead would prefer that the gas be processed at the existing North West Shelf plant at Karratha, which Woodside operates.

All partners told the paper more evaluation of Browse was needed, but they did not confirm their preference for the processing to occur at Karratha.

Analysts have said the competing commercial interests of the joint venture partners and their differing strategic agendas could doom the project.