BP to grab biggest slice of Woodside’s $30b Browse gas project

Woodside plans two giant floating facilities 425 kilometres north of Broome where carbon dioxide, that is up to a high 12 per cent of the gas, is separated and buried in another field, while the gas is piped 1000 kilometres to Woodside’s ageing North West Shelf gas plant to be cooled to a liquid for export.

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Woodside chief executive Meg O’Neill said in February that the Browse joint venture – currently Woodside, Shell, BP, Mitsui, Mitsubishi and PetroChina – had three hurdles to clear before Woodside would commit to starting detailed engineering work. It needs a solution for storing the reservoir carbon dioxide, an agreement with the NWS joint venture to process its gas, and progress on environmental approvals.

Eighteen months of front-end engineering design would follow before the Browse partners would be ready to consider a final investment decision.

Storing reservoir carbon dioxide would go some way to reducing Browse’s relatively high emissions for each tonne of liquified natural gas produced, but it would still be left with high emissions from pumping gas 1000 kilometres and processing it in Australia’s oldest LNG plant.

Woodside secured a greenhouse gas assessment permit in 2022 to study carbon storage of reservoir carbon dioxide in a field near the Browse development.

A Woodside spokeswoman said the solution was feasible and had been incorporated in ongoing engineering and regulatory approval work.

The positive outlook is a reverse of Woodside’s view six months ago when it said in a federal environmental impact statement that burying the reservoir CO2 was a “high-risk, high-cost” option. Carbon storage is not included in the $US20.5 billion cost of Browse.

Under changes to the regulation of industrial emissions passed by federal parliament last week, the Browse joint venture would have to purchase carbon offsets if it did not bury the reservoir CO2.

O’Neill said the two companies not in both joint ventures were “setting the boundary conditions” of the negotiations for the North West Shelf plant to process gas from Browse that have been under way for a number of years. Chevron, with equity in the North West Shelf, is likely to want processing capacity reserved for its own gas fields while Browse partner PetroChina will push for the lowest possible processing tariff.

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For Browse to be developed, state and federal approvals are needed for the offshore development as it straddles the waters of both jurisdictions.

In 2022, the WA Environmental Protection Authority recommended that Woodside be allowed to extend the life of the NWS gas plant, which would allow it to accept gas from Browse, but the approval is under appeal.

Credit Suisse energy analyst Saul Kavonic said that costs were a challenge to the viability of Browse, as were approvals and getting all the participants in the Browse and North west Shelf joint ventures to agree on a way forward.

“Browse is simply not a top-order priority for all involved so will be a slow burn if it is to get traction.”

While BP’s stake would be larger than Woodside’s 30.6 per cent interest, it is understood the UK company wants the local firm to continue to lead the development.

BP and Shell declined to comment.

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