Woodside Moving Forward With Browse, Scarborough Projects At Similar Pace

Reuters

TOKYO, Nov 24 (Reuters) - Woodside Petroleum is moving forward with its Scarborough area gas fields and its delayed Browse liquefied natural gas (LNG) project at a similar rate, and can't say at this stage which will be developed first, its CEO told Reuters.

Woodside agreed in September to buy half of BHP Billiton's stake in the Scarborough area fields off Western Australia for $400 million, in a move that could help speed a decision to develop a project that has been stuck on the drawing board since its discovery in 1979.

With LNG prices depressed, the Australian oil and gas company earlier shelved its Browse project.

"I honestly don't know," Chief Executive Peter Coleman said, when asked which project would be developed first during an LNG conference in Tokyo on Thursday.

"We are going to be moving both at the same pace ... Both are very active at this point in time and I wouldn't want to say which one will go first because I will probably get it wrong," Coleman said.

At a time of plentiful supply, LNG buyers are not committing to long term contracts.

"On the buyers side, they are looking for flexibility in contracts. In our view, they are not ready to sign up to a lot of long green field project contracts," Coleman said.

LNG suppliers have been put in a tough spot as demand from the world's top importers of the past few decades, Japan and South Korea, has declined due to slowing economies, more efficient use of power, and switches to coal and renewables. That has led to a number of projects like Browse being delayed.

It is too early to say whether Scarborough would be able to supply gas to the North West Shelf LNG plant, Australia's oldest and biggest, when its existing fields start to run out of gas in the next decade, Coleman said.

(Reporting by Aaron Sheldrick; Editing by Mark Potter)

Copyright 2016 Thomson Reuters. Click for Restrictions.

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