Woodside Petroleum has recently announced that it has reached an agreement to commence the front-end engineering and design (FEED) phase for the proposed Browse FLNG development, located in Western Australia.
The FEED phase entry decision has arisen following execution of the Browse FLNG Development Domestic Gas and Supply Chain Key Principles Agreement (KPA) with the State of Western Australia. The KPA sets out the Browse joint venture participants’ commitment to negotiate a Development Agreement with the State reflecting agreed principles.
The principles include commitment to reserve for domestic use within Western Australia gas equivalent to 15% of LNG production from the State’s approximate 65% share of the Torosa field.
The KPA also considers the marketing of Browse gas volumes for domestic gas diligently with potential buyers. Where mutually acceptable terms cannot be reached with buyers and reserved gas is not sold, it will be reserved for future domestic use.
Allowing for a final investment decision
CEO of Woodside, Peter Coleman, considers the decision to enter the FEED phase as a significant step towards developing the Browse resources. With the FEED phase, the company and its partners must complete the necessary activities required to finalise the technical and financial details for the project. Details to consider include the commercialisation, timing and sequencing of FLNG deployment. This phase will ultimately allow for a final investment decision (FID).
Subject to approval and registration, Woodside’s interest in the Browse resources will be 30.6%. The company is the operator of the Browse FLNG Development, which is based on three FLNG facilities utilising Shell’s FLNG technology and Woodside’s offshore development knowledge to commercialise the reserves on the Brecknock, Calliance and Torosa fields.
Woodside and the other participants of the Browse joint venture have entered into a joint operating agreement, setting out the governance and management plans for the Browse development assets. It also supports the progression of the proposed development to FID.
Woodside is targeting an FID on the proposed development in 2H16.
As part of the entry into the FEED phase, the Browse joint venture participants entered into an Equity Alignment Deed (EAD), which comprises a series of exchanges of equity interests between the participants, establishing a single aligned interest for each of the participants across the combined Browse project. No monetary consideration was payable in respect of the EAD.
Coleman stated: “We are excited to be moving into the next phase of the Browse FLNG Development using FLNG technology. In particular, we acknowledge the support of key government stakeholders and especially commend the current and previous Ministers responsible for resources for their consistent, clear and long-term approach to oil and gas development.
Edited from various sources by Callum O'Reilly
Read the article online at: https://www.lngindustry.com/floating-lng/02072015/feed-phase-entered-by-browse-flng-development-979/